Standing Committee A

[Mr. Jimmy Hoodin the Chair]

Clause 15

Contracting out

Amendment moved [this day]: No. 160, in clause 15, page 13, line 33, after ‘relates’, insert—
‘(d) shall be subject to the requirements of the Disability Discrimination Act 1995 (c.50) and the Human Rights Act 1998(c.42)’.—[Danny Alexander.]

Danny Alexander: It is a pleasure to welcome you to the Chair again, Mr. Hood. I look forward to serving under your chairmanship in what promises to be a lengthy but engagingly good-tempered sitting. I shall be brief, as much of what I wanted to raise was mentioned in the previous debate.
This is a probing amendment to ensure that the requirements of the Disability Discrimination Act 1995 and the Human Rights Act 1998 will be taken into account in the Department’s contracting with private and voluntary organisations that are to be engaged to deliver much of the work involved in rolling out pathways to work, and so on.
As he did during our sitting on 19 October, in his reply to the previous debate the Minister gave some welcome reassurances on the Disability Discrimination Act and the disability equality duty, which comes into force later next month and which providers in the private and voluntary sector will have to take into account.
I ask the Minister to say something in this debate about the Human Rights Act, because much of what we are discussing has implications under that Act, not least in respect of benefit sanctions, but in other areas, too. What consideration has the Minister’s Department given to the human rights implications of the contracting out of public functions under clause 15?
In respect of the sanctions, the Minister made it clear that the Government have no immediate intention of giving providers the power to sanction that the clause allows for. That may well come about in due course in the circumstances that the Minister tried to describe in the previous debate—if not to my satisfaction, at least to his.
Will the Minister give an undertaking that an assessment will be made of the policy’s impact on human rights, on child poverty and on disability equality, so that the potential adverse impacts of giving those powers to contracted-out providers are taken into account before any decision is made on contracting out sanctions? I got the impression from the Minister’s remarks in the previous debate that he is keen to enter a substantial number of caveats before any decision is made to contract out benefit sanction or decision-making powers. Before any decision is made, a wide range of factors must be taken into account and I will add them to his list: human rights, child poverty, disability equality. I look forward to the hon. Gentleman’s response.

Jim Murphy: It is great to see you in your place, Mr. Hood. We have made substantial progress since you last refereed our proceedings. A cursory look at the Hansard record shows that we have made progress via Marx, Stalin and the Jacobites’ visit to Derby. To understand where they fit in you will have to read the record carefully, Mr. Hood.
I shall be brief so that we can make progress. I can confirm to the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) that child poverty has been established as the No. 1 priority of the Department for Work and Pensions. We are reviewing all our employment and welfare programmes to ensure that they have the maximum impact on child poverty and we will examine not just this Bill and the transition of existing customers, but every proposal to discover their impact on child poverty and their likely outcome.
I confirm again for the purposes of the record the assurances that I gave on 19 October, to which the hon. Gentleman alluded, about the protections of the Disability Discrimination Act and the Human Rights Act.
The effect of clause 15 is to allow the Secretary of State to authorise providers to carry out certain functions of his relating to conditionality. It does not transfer those functions to the providers. Where a contractor is exercising functions by virtue of clause 15, subsection (7) provides that in most cases any act or omission of the contractors in carrying out these functions is to be treated for all purposes as an act done or omitted by the Secretary of State. For the purposes of the Disability Discrimination Act or the Human Rights Act, anything done by a contractor would be regarded as done by the Secretary of State. That means that the Secretary of State remains responsible for ensuring that those functions are carried out in away that is compatible with both the Disability Discrimination Act and the Human Rights Act. I hope that that reassures the hon. Member for Inverness, Nairn, Badenoch and Strathspey and my hon. Friend the Member for Caerphilly (Mr. David), who also raised the matter in an earlier contribution to our proceedings.

Tim Boswell: I am grateful that I am able to intervene on the amendment, although I do not need to do so, particularly after the extremely helpful response that the Minister has given. However, will he concede two things? First, will he concede that it is important, as indicated in the earlier amendment, that any contractor, whether contracted for services, let alone for decision making, is well apprised of the requirements of the legislation and trained on it? Secondly—this is a wider issue—will he confirm that, as a matter of good practice, both the pathways to work Jobcentre Plus providers, and the other providers of contracted services, should be encouraged to get together from time to time to share best practice in this and in other more operational areas?

Jim Murphy: I will give a very brief response. On the contractors, I made that position clear in respect of the Disability Discrimination Act and the Human rights Act, but it also captures what happens with subcontractors. That is the important point. Contracts under the clause will be drawn up so that providers are required to carry out their functions with proper regard to the needs of disabled people. For example, pathways contracts will have clauses that prohibit discrimination and harassment on the ground of disability. Providers will also have to provide reasonable adjustments so that customers can participate in conditionality, and promote equality of opportunity. A cursory reading of the contracts and the paperwork concerning the contracts—I made a commitment in our earlier proceedings to place that in the public domain—will show that the potential contractors in the private and voluntary sector will be under no illusions about their statutory responsibility in terms of the legislation. With those comments, and that reassurance, I invite the hon. Gentleman to consider withdrawing his amendment.

Danny Alexander: As has been mostly been the case over the past few days, the Minister’s response on the amendments has been reassuring.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

David Ruffley: We have had a good debate about the preceding amendments, but I should like to say one or two things about the importance of the involvement of the private sector and the voluntary sector, and why Conservative Members support, with some reservations, the proposition contained in the clause. The Employment Related Services Association—ERSA—which gave evidence to the Select Committee earlier this year, rather punchily suggested this about the advantages of private and voluntary sector, non-state-employed personal advisers being involved in the roll-out to pathways to work:
“Rightly or wrongly, individuals are often uneasy dealing with Jobcentre Plus officials. These officials are sometimes viewed as ‘agents’ of the state, put in place to judge, and determine whether or not an individual is actively seeking employment.”
Those are not my words, and that might be stretching a point. Incapacity benefit personal advisers and the other officials at Jobcentre Plus are dedicated professionals who are there to help people, not to catch them out wilfully or with malice aforethought.
What ERSA is driving at, however, is this. In seeking support, claimants will often show a willingness to take part in training or condition management programmes, or they will say that they want to get better. However, they know that the Jobcentre Plus official to whom they are speaking will be wondering how ill or disabled they are, and outside groups get the sense that claimants feel that they might compromise their right to benefit by disclosing too much. Again, those are not my layman’s perceptions, but the thoughts that were expressed time and time again in the evidence to the Select Committee. There can be an element of trust and a special bond between a personal adviser in a charitable body and the person whom the personal adviser is helping to get back into work, and it is important that we compare that with the relationship that a person will have with someone who is working for the state.
There is a second issue on which we must reflect when discussing increased contracting out to the private and voluntary sector. It is an issue about which sector must have confidence in bidding for contracts, but we have not yet discussed it, which is why my comments will be very apposite to the clause stand debate. Working Links is a public-private sector body and does not belong purely to one sector or the other. I have had many discussions with its representatives and visited various of its projects over the past months. As the Select Committee notes, Working Links believes that the current approach taken by Jobcentre Plus and some pilots has
“promoted unnecessary complexity in providing employment support to benefit claimants”.
That is the result of the perceived complexity of the administration process and the form filling. Working Links said that that did not happen to the same extent in employment zones, which are private sector led, as we all know.
The argument for the employment zone model was supported by the Centre for Economic and Social Inclusion and Reed in Partnership, which, according to the Select Committee, suggested that
“a national roll-out of Pathways based upon the pilots would not be as effective as one based upon Employment Zones which allow greater freedom and flexibility to service providers”
to test different approaches free from too much form filling. The Secretary of State for Work and Pensions acknowledged that in evidence to the Committee, saying that
“in the Employment Zones, for example, the private and voluntary sector providers have a very good track record in improving outcomes for Incapacity Benefit claimants and Jobseeker’s Allowance claimants. I think their performance”—
that of the private and voluntary sector—
“actually exceeds Jobcentre Plus in a number of very important respects.”
The principle of contracting out is therefore a good one, but—there is a but—there is a demand for safeguards. We need to understand that, as the Minister will when he oversees the contract design, which will be an iterative process. As the Disability Rights Consortium said,
“The impact of using private and voluntary sector providers to deliver Pathways in new areas without having to replicate existing provision will need to be closely evaluated as support may vary”
under the contracts
“by locality, provider or individual adviser. Identifying the impact on employment rates by different impairment groups will be important.”
Is that point reflected in the way the Minister is designing the contracts, looking at the effect of these contracts in different areas with different providers on the employment rates of different impairment groups? I imagine that he has thought of this, but is there any mechanism by which that will be measured as the roll-out goes forward?
I turn to another area where safeguards are clearly required. The Opposition do not believe in red in tooth and claw, free market provision; in particular we are not keen on widespread, so-called cherry picking or creaming. Some claimants, whether for employment and support allowance or incapacity benefit, by definition have different disabilities. Some will find it easier to find employment than others. Those with severe learning disabilities, mental health conditions, autistic spectrum disorders as well as those with severe physical disabilities will require more support and take longer to find sustained employment than those with less serious conditions.
Contractors should not be allowed to cherry-pick just those claimants who are easiest to place. Contractors must be able to meet their targets by getting more people back into work so that the Government can hit their target of 1 million men and women off the IB rolls by 2016. But it must not be a simple, bog standard form of target hitting by helping the easiest first. I am not asking for specimen contracts, but will the Minister share his thoughts on this and give us assurances that the contract design process is looking at how cherry picking can be minimised? It will never be eliminated and it would be quite unrealistic to think that it could be.
The Minister referred to proposals first mentioned by my hon. Friend the Member for Runnymede and Weybridge (Mr. Philip Hammond) on Second Reading about payment by results. I do not want to have a second reading debate now about what Opposition policy is. I know that you, Mr. Hood, being a stern and disciplined chairman, will not want anyone to be tempted down that route. But the Minister mentioned it on the first day of these proceedings and he said that he might want to raise it later on the Bill. I have a sneaking suspicion that this clause stand part debate is the right time.
For the record and so there is no ambiguity, the Government proposals and the briefing that they have given to the outside organisations are to the effect that payment by results, the outcome-based part of the new regime that the Bill introduces and to which this clause relates, will involve roughly a 30 per cent. upfront fee to the private and voluntary sector providers and 70 per cent. will be payment by results: put crudely, if a job or training is delivered by the contractor who will be able to do the roll-out for ESA if the Bill goes through. It will be done anyway as part of the national roll-out of pathways before ESA comes in.
The Minister referred to a Conservative proposal for the payment by results not being 70 per cent. purely outcome based and 30 per cent. upfront fee, but being 100 per cent. payment by results. That is not true in relation to all the new claimants who will be subject to the Bill. New claimants going on to ESA will be helped by contractors who will get 30 per cent. upfront and70 per cent. payment by results.
The Minister will be pleased to hear that we are not in dispute with that proposition. Our point is slightly different. The Minister has said correctly that, if someone is on incapacity benefit for two years, they are more likely to die or retire than to ever find a job. He then went on to say:
“as a priority we will focus on those who are newest to incapacity benefit or employment support allowance.”
In the same vein, the Government Green Paper said, in the roll-out of pathways to existing claimants: it will be only “as resources allow”. That got my hon. Friend the Member for Runnymede and Weybridge, my hon. Friends on the Opposition Front Bench here today and me, together with other outside groups, thinking how we could get a better deal for existing claimants than just what resources allow. We know the phrase “as resources allow” is Treasury speak for “we’ll see what we can do on the public spending round, but maybe they’ll get more money and we’ll let them have more support, but only dependent on what the Treasury can find”.
We were concerned, as were outside bodies, about what is a resource constraint. Under the Bill, not enough support will be given to existing claimants when they come on to ESA, nor will requisite support be given to existing claimants on IB before ESA kicks in.
We all know that the Department works under cash constraints. An example of how that works is that the National Audit Office has identified anecdotal evidence of creaming within the new deal for disabled people. Contracts out to tender for the NDDP were based on price, encouraging a large number of low unit price and low volume contracts offering services. Low numbers were also targeted by the programme because Jobcentre Plus was allocated only enough funds for around 4 per cent of the total IB population in an area. This is not something I say critically of Ministers, but we have to acknowledge, as the National Audit Office have acknowledged and the Government in replies have occasionally acknowledged, that the numbers of people who are the subject of help in, for instance, the new deal for disabled—it would also apply in similar programmes—is 4 per cent. This is a very small figure and we have to ask ourselves why it is only 4 per cent. It is not because Jobcentre Plus only wants to help 4 per cent; it is due to public spending constraints.
Let me give one example. Ministers will be aware of this and I do not think they are any more happy about this than we are. The Sure Trust, among many others—I could also name the Patwith Trust—say that there can be a contract to get, for the sake of argument, 500 people into work who have physical disabilities and who have been on benefit for, say, two or three years. If the contract is to get 500 people into work in Birmingham, for example, the organisation has a yearly contract to hit that 500 target.
The organisation may hit the 500 target after three months. It has done very well. Having reached the target nine months ahead of schedule, it goes back to Jobcentre Plus and says, “We have done in three months what the contract says we can do in 12 months. We are on a roll here. We are doing terribly well. Can you give us more money so that in the next nine months we can get more people back to work?” The answer is no because of the spending constraint at the Department. The departmental budget for that cannot be exceeded.
We know this is not an anecdotal example, it happens all the time.

Adam Afriyie: Is my hon. Friend suggesting that the policy of the Department for Work and Pensions or the policy of the Treasury could be holding back the speed of roll-out and take-up of ESA?

David Ruffley: My hon. Friend is there. The Minister is saying—we are all saying it—that existing claimants will only receive the support in the roll-out process before 2008, when ESA kicks off, and after ESAis introduced “as resources allow”. If I have misunderstood the meaning of “as resources allow”, no doubt the Minister will put me right when he replies. It seems that priority will be given to those closest to the labour market. There is nothing wrong with that; they have to be given support to get back to work. The Minister said:
“As a priority, we will focus on those who are newest to incapacity benefit or employment support allowance”.—[Official Report, 10 July 2006; Vol. 448, c. 1093.]
The Green Paper says that the roll out of pathways to existing claimants will happen only “as resources allow”. That is not the same regime as that for new entrants coming on to incapacity benefit in the roll-out period, or new claimants for ESA. If we are wrong about that, I should be grateful if the Minister could point to where he has changed his view about the statement “as resources allow”. I want a constructive debate because the point about existing claimants was not invented by Her Majesty’s Opposition. Nor was it an hallucination on the part of experienced private and voluntary sector providers. It is fact. If there were a new policy that the Government have announced about existing claimants that none of us has heard about, we should be grateful to be put right.
My final question relates to the pathways to work roll-out, which is essential to the proper functioning of the ESA contracting regime under the clause. The contracting regime for ESA will be the same as that for the roll-out to pathways. The Minister said in his letter of 4 July to Members of Parliament that the phase that will begin in October 2007, the start of the roll-out of the pathways service to the remaining 60 per cent. of new IB claimants and repeat IB customers, will be
“mainly via private and voluntary sector partners”.
That will roll on until April 2008.
I do not wish to be known or thought of as a politician who likes dancing on the head of a pin when it comes to language, but will the Minister quantify “mainly” in that context? Does it mean 90 per cent.-plus private and voluntary sector providers getting that business? Is it 60 per cent., or somewhere in between?

Jim Murphy: Again, I would not wish to test the patience of the Committee by going into every detail of all the substantial questions that the hon. Gentleman asked. They have all been fair, and I acknowledge the legitimate issues that have been raised by others. I am not accusing him of dancing on the head of a pin and, with my size 13 feet, there is no pin big enough to dance on. I was not about to raise the issue of the 100 per cent. incentivisation on outcomes, although I have had the details of it with me at each sitting. The hon. Gentleman is right; on Second Reading, the shadow Secretary of State for Work and Pensions, the hon. Member for Runnymede and Weybridge, pressed the Government on such matters. He said
“A payment of 30 per cent. of the fee up front is precisely what creates the resource constraint which is constantly referred to as a reason for not rolling out the programmes more quickly. Why not utilise the private and voluntary sectors’ appetite for risk...on a genuine no win, no fee basis...paying them only when they have not only placed someone in work but maintained them in work”.—[Official Report, 24 July 2006; Vol. 449, c.636-7.]

David Ruffley: The full quote would be nice.

Jim Murphy: I will read the whole lot if the hon. Gentleman wishes. The quote can be found at column 636 of Hansard. I make the point not to dance on the head of a pin, but to say that we simply do not believe that constructing the contracts in terms of 100 per cent. outcomes is the right way to progress.

David Ruffley: My hon. Friend the Member for Runnymede and Weybridge was talking about existing claimants. The proposal would enable a much faster and deeper roll-out of pathways to work to include existing claimants. Our proposition is only in relation to existing claimants who would not otherwise get the full support because, as resources allow, it is a constraint. I repeat that we do not dispute the 30 per cent. up-freeze, 70 per cent. outcome model that the Minister proposes for new entrants.

Jim Murphy: Uncharacteristically, the hon. Gentleman has not grasped the detail of what we seek to achieve. I say that that is uncharacteristic, because I think that all members of the Committee will acknowledge that he has taken great care to understand the detail of the proposals, as they all have. However, I shall respond to the specific points that he raised. The 100 per cent. outcome funding model is not attractive for existing or future customers in terms of the national roll-out of pathways and any future contracting.
In answer to the question about how existing customers will be treated in provider-led pathways, I return to my earlier comments. In the key criteria document, which we will place in the public domain, subject to commercial confidentiality, section 1 asks potential contractors to address the specific needs of and barriers to all customers, so there will be no distinction or creaming. The hon. Gentleman quite fairly raised this issue on behalf of himself and others, and we all share his concern that contracts should be constructed in such a way as to ensure that opportunities for creaming are minimal.
My assertion that we should help the newest IB claimants as a matter of priority is based on the lessons learned and experience gained from pathways, and on the information that the hon. Gentleman rightly gave us about people who are on IB for two years or longer being more likely to die or retire than ever work again. Three quarters of current IB claimants fall into that category. What I am saying is that, at the point of migration, my personal priority would be to move the newest claimants across first. That is the distinction I am making about supporting the newest claimants over and above anyone else.
We are happy to learn from the experiences gained as pathways is rolled out elsewhere in the country, but the current approach is that the newest claimants and those with dependent children will be first. That is the distinction that I seek to make today and will seek to make in the future and as we migrate people on to ESA, and that is the point that the hon. Gentleman seems not to have grasped. I do not say that in any negative way—

Jeremy Hunt: Say it gently.

Jim Murphy: I will say it gently, rather than Ruffley, of course. I have been making that joke throughout the Committee, but it has taken hon. Members until now to realise.
Current customers on IB are able to access the support available in pathways in 40 per cent. of the country. As it is rolled out—before 2008 and before ESA is in existence—current IB customers will beable to access the support that is available in pathways. The distinction that the hon. Member for BurySt. Edmunds (Mr. Ruffley) reasonably raises as a concern, will not be there, because ESA is the benefit structure, and pathways, when it is on the ground across 100 per cent. of the United Kingdom, will be the enabling—

Natascha Engel: I am sorry not to let the Minister finish his sentence. On the issue of access, will he confirm, in light of yesterday’s announcement about the 0800 and 0845 numbers, that new claimants on ESA will use an 0800 number rather than an 0845 number?

Jim Murphy: My hon. Friend has raised this matter with me pretty doggedly. Earlier this week, we announced that in future all working age benefits information will be accessible through an 0800 number from landlines and telephone boxes, and of course we could examine how to enable that for pay-as-you-go mobiles. It is an important new announcement. That point of contact for Jobcentre Plus and working age benefits will help as regards access. Hon. Members might be interested to know that, when I had conversations with a small group of folk experiencing mental illness, one of the things that frustrated them was the complexity—the repeat phone calls, the additional cost. I do not want to overstate it, but in some instances that complexity was a barrier to accessing the support available, because they had not yet entered the system. I can confirm that, from 2008, ESA claimants will be able to access services through an 0800 number.

David Ruffley: If it is the case that existing claimants will get the same level of support as new claimants in the roll-out and post 2008 when ESA is up and running, why do existing claimants only have to volunteer? There is no mandatory requirement on them to attend WFIs.

Jim Murphy: I will come back to the sentence that I was halfway through, and then I will respond to that point. The national roll-out of pathways will enable progressive support—personal advisers and everything else—to back up the new employment and support allowance from 2008.
In respect of the conditionality that different groups will have to undertake, post 2008, new customers on ESA, depending on whether they are in the support group or the work-related activity group, will have to undertake work-focused interviews and, as we roll it out, work-related activity. Before the migration, existing customers on IB will continue to receive the six work-focused interviews. In different parts of the country, we are piloting to find the right mix of sanctions and conditionality in the pathways roll-out.
It is important to put on the record that we have made the policy decision, through the Green Paper process and elsewhere, that from 2008, as existing customers are migrated across, the conditionality will be in attending work-focused interviews on the basis, crudely put, that they signed up to IB as a certain benefit. We are changing aspects of that benefit, but we do not think that it would be right to force existing customers, at the point of migration to ESA, to undertake work-focused interviews and also work-related activity. The compulsion on work-related activity will be for new customers on ESA from 2008. That is the distinction. We can continue that legitimate debate, but that is what we have settled, as a matter of public policy, about where the burden of conditionality will lie.
I shall make some progress, if I may, on a couple of other matters. In terms of unnecessary administration, the hon. Member for Bury St. Edmunds makes a fair point. In determining what management information and reporting we require from providers—hopefully this will be reflected in people’s assessment of the paperwork that can be provided—we have tried to strike a balance between a genuinely black-box approach, which we discussed before our break, and ensuring proper contract management. He will recognise that it is an important and difficult balancing act to enable flexibility in the private and voluntary sector but also to maintain national standards, for example in condition management, to ensure a degree of quality.
On clause 15, all regulations, safeguards and appeals that apply to the process, such as work-focused interviews, will apply in the same way as they do in Jobcentre Plus. I think that the hon. Member for Inverness, Nairn, Badenoch and Strathspey asked about that.
I hope that I have reassured hon. Members. I had another excellently crafted, detailed speech to read out, and with the Committee’s permission and your indulgence, Mr. Hood, I will allow my noble Friend the Lord Hunt to read it out when the Bill reaches Committee in the House of Lords. That would save an awful lot of people drafting and crafting time.
There is real unanimity about the capacity of the private and voluntary sectors. Clause 15 enables that roll-out to those sectors. It is an important component and building block of the employment and support allowance from 2008.

Question put and agreed to.

Clause 15 ordered to stand part of the Bill.

Clause 16

Income and capital: general

Danny Alexander: I beg to move amendmentNo. 198, in clause 16, page 14, line 21, leave out paragraph (a).
The purpose of the amendment is to probe the Government’s intentions for the rules on notional income and notional capital and the way in which those will be applied in the context of the employment and support allowance. As the Committee will no doubt know, the notional earnings rule—as it applies to income support—can be applied in certain cases in which people are not undertaking paid employment, such as voluntary or other work, and Jobcentre Plus does not think that it is reasonable to provide their services free of charge. That means that someone is treated as if they were in a paid job. For example, if someone works 10 hours a week on a voluntary basis, that can be regarded as 10 hours a week of actual employment.
The notional earnings rule means that the notional amount of money that someone is deemed to be earning can be taken into account and removed from income support on a pound-for-pound basis. In other words, people’s benefit can be reduced by an amount, even though they have not received it, because theyare doing an activity in the community, for example, which Jobcentre Plus deems, for whatever reason, appropriate. Likewise, earnings disregard rules—which are pretty ungenerous anyway—would also apply. In some cases, expenses when undertaking voluntary work can be counted as earnings. Therefore, someone who has had their travel expenses reimbursed could have those treated as earnings and therefore they would count towards the £20 earnings disregard limit.
Will the Under-Secretary clarify the Government’s intentions for provisions on the employment and support allowance? The notional earnings rule was invented to tackle the situation in which people may have forgone earnings to maximise their benefit situation. However, in the context of a Bill that deals with work-related activity and people undertaking activities that can help them get back into the labour market—this point has been made on both sides of the Committee during the course of our proceedings—activities such as voluntary work can and should be regarded as work-related activity as part of pathways to work or whatever.
How will those rules apply to employment and support allowance? If necessary, will the Under-Secretary consider a form of limited amendment to the notional earnings rules specifically in relation to the employment and support allowance so that people engaged in voluntary work, as part of the process of getting closer to the labour market, can do so without being penalised. I look forward to her response.

Tim Boswell: I welcome you, Mr. Hood, back to the Committee. We are anxious to make progress and therefore I will not detain the Committee long.
Dealing with the generality of the clause—this is not a clause stand part debate, and I hope not to make a speech on that—we could interpret the amendment as being about the wording and the construction of the clause, as it would leave out one of its crucial subsections. We should probably impart one further dramatis persona to the Committee in the shape of Kafka, because the idea of prescribing something as capital or income that a person does not possess, or it is a disregard—income to be treated as capital, capital to be treated as income—is overtly in that vein. I would be more than delighted if I could make that particular case to Her Majesty’s Revenue and Customs, but I am more concerned that it might catch the habit and start interpreting my tax schedules along those lines.
The explanatory notes on the clause are long and particularly helpful. I shall make one other obiter remark. The Bill is constructed rather like Beethoven’s symphonies: the odd-numbered clauses are weighty and important, whereas the even-numbered ones are lighter but nevertheless perfectly delightful.
We have good meaty explanatory notes, so I simply ask the Under-Secretary to assure the Committee—I think it is clear from the explanatory notes that everything in the provision is precedented and will be tied down in regulations—that in connection with the treatment of capital and income, the provision will not be some kind of arbitrary game, as I jocularly suggested, and that it will be precedented in relationto other benefits and tied down to particular circumstances, such as the wilful evacuation of capital assets, with which we are fairly familiar in respect of other benefits.
Having worked on the pension credit legislation some years ago, I know that most people do not think that the tariff for income is particularly generous to the claimant. I shall not reopen that issue, but perhaps the Under-Secretary could give the important assurance that she would anticipate that, unless there is good reason to the contrary, the same approach would be taken in relation to all benefits. This is like jobseeker’s allowance, but the capital tariff, or the notional income, is treated as if it were more or less the same as pension credit. It would be unfortunate for the Department’s business if those got out of line.
I want to reinforce what the hon. Member for Inverness, Nairn, Badenoch and Strathspey said about voluntary work. It is an important pathway into employment, and it is important to encourage rather than discourage it. The level of notional income should be set with that in mind.
I have recently been in correspondence with the Princess Royal Trust for Carers about some exchanges that I had on other matters to do with the position of disabled people who have family responsibilities. I believe that currently nobody is treated as notionally in work because, notwithstanding their condition, they have some family caring responsibilities, although the Under-Secretary will be able to reassure the Committee on that. The issue has not been much mentioned.
I invite the Under-Secretary now or in response to a later clause, possibly in relation to private schemes, to reflect on the importance of disability employment advisers and personal advisers reviewing the situation not just of the person before them as the claimant but of their family. That will obviously influence how they are available for work, the kinds of things that theycan do, and the constraints that they are under. Understandably, and without prejudice to our earlier exchanges about work load, case load, box-ticking and the rest of it, people will often tend to consider the claimant’s situation without necessarily looking at the family in the round.
Several hon. Members properly raised the issue of child poverty. We will not unlock that problem unless the solutions for those now claiming the allowance are eased or accommodated as far as possible to meet their family circumstances. Having said that, the amendment is tabled in a certain spirit, and we are anxious to make progress. There is no essential difficulty with the clause, so I shall leave my hon. Friend the Member for South-West Surrey (Mr. Hunt) to discuss disregards in relation to a later amendment.

Anne McGuire: I am delighted to see you back in your Chair, Mr. Hood. I have missed you.
I can allay the fears of the hon. Member for Inverness, Nairn, Badenoch and Strathspey, who is in danger of confusing two issues. One is voluntary work, and we have said more than once that volunteering is a stepping stone along the pathway to work. There is a major difference if someone is working in a commercial environment and appears not to be declaring any income from that job. As a Member of Parliament I have known circumstances in which someone has worked full-time in a business and has been astonished to find out that the DWP thought they might be earning some money when they were also claiming benefit. That scenario will be covered rather than the type that the hon. Gentleman painted.
On capital, perhaps I can highlight another scenario. To circumvent the capital limits, a person might put all their capital in the name of a trusted friend—it would need to be a pretty trusted friend—or a family member. They might effectively dispose of capital so as to come under the threshold. The clause will deal with such scenarios.

Tim Boswell: Is it fair to summarise the Under-Secretary’s comments as being that the clause is primarily dedicated to dealing with abuse and deliberate attempts to frustrate the system, rather than dealing with people with entirely legitimate activities who might get caught in the fire? Will she at least assure us that that is what she is trying to do in the regulations?

Anne McGuire: The hon. Gentleman puts his finger on the nub of the matter. We have increased the capital limits—we doubled them in April 2000—and there is now a limit of between £6,000 and £16,000. For older people in residential care the limit is around £10,000. The clause will essentially allow us to deal with those who seek to circumvent the rules. They are the same rules as currently exist for income support, and they should be translated into the new legislation.

Danny Alexander: It was the specific assurance on voluntary work that I wanted. Having received it, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Jimmy Hood: With this it will be convenient to discuss new clause 13—Earnings disregard level—
‘(1) The Secretary of State may make regulations that the level of earnings disregard for claimants of Employment and Support Allowance shall be set at a level that he shall by determine.
(2) In determining the level of earnings disregard under subsection (1) the Secretary of State shall have regard to labour market conditions including the National Minimum Wageas defined under section 1 of the National Minimum WageAct 1998 (c. 39).’.

Jeremy Hunt: I, too, welcome you back to the Chair, Mr. Hood. We are trying to make progress. We know that that must be the case because we have not heard the weather forecast for Inverness, Nairn, Badenoch and Strathspey. I regret that slightly, because rather like “The Archers”, I am beginning to follow that forecast and I am a bit curious as to how it might be this afternoon.
I thank you for selecting new clause 13 with clause stand part, Mr. Hood, because it is only loosely related to the clause. It deals with the income of claimants, and there is not really anywhere else in the Bill that is suitable to discuss that. Before speaking to the new clause, I have a question for the Under-Secretary. Clause 16(3)(b) gives the Secretary of State the power to disregard the capital or income that a person possesses. Will she confirm that she might be prepared to do that if a disabled person is asked to take part in a consultation on Government policy and is given travel expenses? She and I both spoke at the annual general meeting of the British Council of Disabled People recently. One of that organisation’s great concerns is that it is often asked to participate in consultations about policy, but often gets little or no remuneration for it. It is particularly concerned that if its members receive any remuneration—even travel expenses—it could count as income towards their earnings disregard. Will that be one occasion on which the Secretary of State could show a bit of latitude?

Tim Boswell: Does my hon. Friend agree that this may apply to certain people who may receive expenses or honoraria, or may decline to claim them in relation to anything that they are required to do in connection with user consultations under social care legislation? Parliament encourages consultation with service users, so it would be unfortunate if it appeared to subvert the position of users through the earnings disregard.

Jeremy Hunt: As ever, my hon. Friend makes an important point. A specific example of what he is talking about would be the pilots concerning individual budgets, where it is vital to get service users’ views if programmes are to be rolled out effectively and successfully. I am sure that the Government do not intend to put off disabled people from participating in such consultations, so it would be great if the Minister could reassure the Committee.
Moving on to new clause 13, I understand that the real intention of the Bill is to tackle the barriers to work faced by many people with a limited capability for work. It is encouraging that the Bill rolls out various proactive support measures that could help people make the difficult transition and engage in the world of work. However, I tabled the new clause because I am concerned that the Bill fails to deal with a structural problem that is a huge barrier to people re-engaging or engaging for the first time—[Interruption.]

Jimmy Hood: Order. May I ask the hon. Member for North-East Derbyshire (Natascha Engel) to resume her seat?

Jeremy Hunt: I am grateful, Mr. Hood. I am hoping that the hon. Lady will intervene later, because she made some interesting interventions earlier when we were talking about Tunbridge Wells Tim and Derbyshire Dave.
I am concerned that built-in disincentives, including the strict rules about how much money can count towards the earnings disregard, strongly discourage people from engaging in the world of work. If we remove the structural problems with the earnings disregard, we will have far greater success with the proactive support measures advanced under the Bill as part of the pathways roll-out.
On the DWP website, which I viewed last night, under a heading of “Working while claiming benefit”—

David Ruffley: You should get out more.

Jimmy Hood: Order.

Jeremy Hunt: We return to my activities last night, which included looking at the DWP website, which I am proud to have done because it was important for our debate today.

Jimmy Hood: Order. The hon. Gentleman has only himself to blame.

Jeremy Hunt: Thank you, Mr. Hood. As a new Member of Parliament, I shall take very seriously your advice about not getting things transcribed things on to the record that are best left untranscribed.
The DWP website says:
“You cannot usually work while you are getting Incapacity Benefit, Severe Disablement Allowance, National Insurance Credits or Income Support because of illness or disability. You may be able to do the following types of work but you should check with your local Jobcentre, Jobcentre Plus or social security office before you start.”
Then it talks about those types of work. Neither the Bill nor the explanatory notes make it clear howthe dual structure works in this regard. I hope that the Minister is able to enlighten the Committee about ESA and the dual structure that exists at the moment, where people on income support only have a £20 earnings disregard, but those on incapacity benefit have the permitted work higher limit of £81 a week. The Bill does not make it clear whether the Government intend that dual structure to continue.
I am sure that it will not have escaped the Minister’s notice that, curiously, there is a much lower earnings disregard for those likely to be the poorest people involved in the programme. Will the Minister clarify whether she thinks that it is appropriate to have two levels of earnings disregard given that part of the benefit of introducing new welfare reform legislation is a move towards simplicity and transparency, where possible? Having complicated rules dependent on the individual claimant for earnings disregard would not appear to do that.
The earnings disregard for people on income support has not changed since its introduction, but the labour market conditions have. Disability Alliance told the Select Committee on Work and Pensions that until October 2005 those on income support could work for up to four hours on the minimum wage, but since then increases to the minimum wage to £5.35 mean that they can work for just over three hours. It asked whether it was not incongruous that a person can work for a certain number of hours one year, but not the next. I put it to the Committee that that is against the spirit of the Bill—a spirit that the Opposition welcome.
The Select Committee recommended that the earnings disregard be set at four hours at minimum wage and uprated annually. New clause 13 is actually weaker than that and would allow, but not compel, the Secretary of State to uprate the earnings disregard in line with the minimum wage and require him or her to take account of other labour market conditions, not just the minimum wage—other conditions need to be factored in.
I put it to the Minister that it is not necessarily the case that increasing the disregard would amount to an increase in public spending. If people did not think that it was going to affect their benefits package, they would feel more encouraged to engage in the world of work—in many cases they are not because of the earnings disregard—and to take those first few halting steps. In that case, in the long run, the Bill would be more successful in getting people off employment and support allowance and back into work.
The Minister gave an interesting example from her constituency surgery when she met someone working for a commercial organisation who did not understand why that might be incompatible with claiming benefits. The concern is that if the earnings disregard rules are too generous, everybody doing a part-time job might think, “I will sign on and claim benefits at the same time as earning a wage from my part-time job”.
Actually, the Government could be a lot bolder with earnings disregard because of the structure of the pathways to work programme. In reality, people have to go through a process before being considered for ESA and talk to a personal adviser who has much more detailed knowledge of their personal situation than has been the case before. In that situation, with that knowledge of individual claimants, it ought to be possible to be a lot more generous with the earnings disregard.
I thank you again, Mr. Hood, for allowing this new clause to be debated. To wrap up, I remind the Minister that Capability Scotland said that 50 per cent. of working-age disabled people in Scotland did not want to engage in the world of work because they were worried that it would threaten their benefits package. Let me remind her also that the Secretary of State himself has talked frequently, in the House and the media, about the relationship between poverty and worklessness. Is it possible that by accepting the new clause we could turn the spotlight on the barriers created by permitted hours and the earnings disregard? Will she consider supporting the new clause as a step in the right direction to dealing with that issue?

Danny Alexander: I would like to add a few remarks to those of the hon. Member for South-West Surrey on earnings disregard. It is an important issue to raise at this stage. I shall not comment on his nocturnal activities, but I do think that his amendment has drawn attention to an important issue. The situation is worse than he described because he dwelt only on the permitted working rules in relation to incapacity benefit and earnings disregard in relation to income support. But of course there are also earnings disregard that apply to housing benefit. In relation to incentives to work and the agenda to make work pay, is it worth someone going to work, as the Bill tries to encourage people to do? Do people feel that when they go to work, they receive a reasonable amount of the money that they earn?
The question of earnings disregards is important. The earnings disregard is set at £20, which means that someone can carry out less than four hours work on the minimum wage before they start losing benefits. Depending on which benefit they receive, they may lose it quickly, too. Recent figures suggest that as a result of those tapers, people can then lose their benefit at the rate of 70p to 90p in the pound of new wages earned. If one were to suggest such rates for people at the top of the income scale, there would be squeals of pain from the City and elsewhere; however, the Government consider it acceptable for people at the lowest end of the scale.
The earnings disregard will allow a proportion of income to be earned before the clawback starts. It will be critical to people who want to try out not just work-related activity, but a few hours of work a week, or to people who have a fluctuating condition and are able to work less than 16 hours a week. Tax credits that help people make their work more worthwhile do not kick in until 16 hours have been worked.
It would be useful if the Under-Secretary were to address not only the earnings disregard for employment and support allowance, but the interaction between the different earnings disregards for different benefits. After all, someone in receipt of ESA is likely—although not certain—to be in receipt of housing and other benefits, as the hon. Member for South-West Surrey said. All earnings disregards will have a substantial impact on the financial incentives for people to return to work.
I would be grateful if the Minister were to explain both the Government’s thinking on earnings disregards, and her discussions and thoughts on the idea of higher earnings disregards to help get people off benefits and back to work and to help a range of other claimants who face substantial disincentives. That includes high marginal withdrawal rates of benefits. A higher earnings disregard could help someone move higher up the ladder towards work, before that person’s benefits started being taken away. What we do about marginal reduction rates of benefits is a matter for a separate debate, although it is important. We could start by establishing earnings disregards at a sufficiently generous rate that allowed people to try out work, and for work to be financially worthwhile.

Anne McGuire: Mr. Hood, may I ask whether I will be replying to the debate on clause stand part as well as new clause 13?

Jimmy Hood: Yes.

Anne McGuire: Thank you for that clarification, Mr. Hood.
I am delighted to have had this discussion, because as my hon. Friend the Minister said during the debate on clause 13, it is an important issue. He also said that 
“regulations could, for example, state that it is paymentsafter deduction of expenses that are prescribed for the purposes of deduction.”—[Official Report, Standing Committee A,17 October 2006; c. 85.]
He was interested in the points made during that debate.
I shall clarify some other points. Under incapacity benefit, as the hon. Member for South-West Surrey said, permitted-work rules allow a person to continue receiving benefit while they work. We recognise the importance of work. There are two limits: the lower permitted one of £20 a week and the higher limit of £86 a week, which is available in limited circumstances and allows someone to start to make the move from part-time work into full-time work in a supported environment. We have tried to look at the spectrum of support that is needed.
There is no evidence to show that a blanket disregard on its own is effective in moving someone from worklessness or incapacity benefit into work. It is a matter not just of what income should be disregarded, but of the other mechanisms that need to be put in place. I have had discussions with Capability Scotland and other organisations on the confidence-building measures that we need to put in place, because the hon. Gentleman is right: if someone is sitting on benefit for a long time there is a security in knowing what income they have and in knowing that they have an entitlement to certain things. If a person is asked to leap into something that is perhaps beyond their recent experience we need to consider how to ensure that that person has the confidence to make the leap.
As we all agree in this Committee, the best way out of poverty is into work. That is why we have extended the linking rules so that someone who holds an entitlement to a benefit has the security of knowing that, subject to their meeting the criteria, they can move back on to that entitlement if they try work and it does not work out. It allows confidence to be built up with the security of knowing that they have not completely cut the cord between themselves and the benefit system. I think that that addresses some of the issues that were raised.
I appreciate that the hon. Gentleman wants us to give a commitment to raising the rate, but I say, gently, in the words of my hon. Friend the Minister for Employment and Welfare Reform, that we cannot just take the income disregard in isolation, as a series of measures needs to be put in place.
On the point raised by hon. Member for Inverness, Nairn, Badenoch and Strathspey, decisions on how housing benefit, council tax benefit and so on will interact with contributory employment and support allowance cannot, of course, be made until the structure of the ESA has been decided. Some of those issues will be considered further down the line and, as we have already given a commitment, will be subject to other debates.

Danny Alexander: I understand the legal reasons for the Minister’s point. She is right to say that a range of other factors have to be taken into account; earnings disregards cannot be treated in isolation. However, someone in receipt of housing and council tax benefit who starts earning more than £20 a week starts to lose benefits at the rate of 85p for every additional pound earned, which is a substantial disincentive to work. Will the Minister take that factor into account in thinking through how ESA should relate to the housing benefit issue?

Anne McGuire: I have heard what the hon. Gentleman said, but I have gone as far as I am prepared to go in today’s discussions.

Adam Afriyie: Is the Minister saying that she is not prepared to link any disregards to the minimum wage, which was set by her Government as a benchmark for minimum earnings and for many other important things that underpin our society? Can the Minister make that absolutely clear to the Committee?

Anne McGuire: It is lovely to hear the minimum wage being embraced in such a wholehearted way by a party that made us sit through a long night when we used to have all-night sittings. My hon. Friend the Member for Dumfries and Galloway (Mr. Brown) remembers it well.

Jimmy Hood: Order. We may be drifting away from the point.

Anne McGuire: I know, Mr. Hood, but it was worth a try.

David Ruffley: The Conservative party has moved on. Will the hon. Lady?

Anne McGuire: The proof of the pudding may be in the eating, but I hope that we do not have to eat it for a long time. I go to my earlier point. It is not specifically about the level of the disregard, although as my hon. Friend said earlier, it is an important issue and one that we will have to consider. That is probably as far as the hon. Gentleman will tempt me today.
The Government regularly review the level of disregards, taking into account a large range of relevant factors, one of which is the prevailing labour market conditions. We need to ensure that we do not undermine the incentives for people who move off benefits into full-time work if that is appropriate. It is about getting the balance right and not creating a situation where it is more acceptable for people to be on benefit plus a high disregard, which either the hon. Member for Inverness, Nairn, Badenoch and Strathspey or the hon. Member for South-West Surrey highlighted. We are currently working on how we can achieve that balance. We will be setting out the rules on permitted work and earnings disregards in the regulations that follow the Bill and those regulations will be subject to debate and discussion in the House.
I think that I have dealt with the specific points raised in the debate. The clause will allow us to prescribe when a customer can be treated as having income or capital which he no longer has, for example, where it has been disposed of deliberately; disregard certain capital and income, for example, the value of a customer’s house or personal possessions; and provide a capital limit so that those with capital over this amount are not entitled to benefit. Clause 16 is a crucial part of the Bill as it enables the value of income and capital to be treated in a way that is similar to existing benefits.

Jeremy Hunt: I was informed by the Clerks that I needed to let you know, Mr. Hood, before the end of the debate on the clause whether we wanted to press new clause 13 to a vote. May I, in that spirit, briefly respond to the Minister and explain what our thinking on that is?
The Minister mentioned the minimum wage. This is central to this issue. I freely admit that I had concerns when the minimum wage was introduced that it would price some people out of the market. I was wrong. That has been demonstrated by what has happened subsequently. May I praise the Minister? The minimum wage is a brilliant mechanism to work in partnership with the pathways to work programme. Without a minimum wage there is obviously a real concern that employers might exploit the fact that the benefit system exists to pay lower and lower wages and hope that the state would fill the gap. With the minimum wage that is no longer possible.

Tim Boswell: I felt I should declare an interest as some Members may recall that I had a certain degree of responsibility both for keeping them up all night on the minimum wage and, conversely, in receiving their attentions in Committee over two whole nights of debate. Whatever else one may say about that process, it was right to bring out the issues. I simply wonder whether my hon. Friend would reflect on the fact that the more the Government succeed in raising the acceptable level of the minimum wage, ipso facto, if they do not alter the provision for disregards, the proportion of time that is available within the rubric will be reduced.

Jeremy Hunt: As ever, my hon. Friend makes an important point, and he does so in the Daventry style of debate, which we have got used to in the Committee. The problem, as he rightly says, is that people will be able to work for less and less under the earnings disregard as the minimum wage increases.
The Under-Secretary said that there is no evidence that a blanket earnings disregard on its own is effective and she is absolutely right that it must be part of a whole package of measures, including confidence-building measures. However, it is still a significant hurdle, and the evidence from Capability Scotland is just one indication of that. To take other, anecdotal evidence, disabled people who are out of work will say that their biggest fear is doing anything that could compromise their benefits package, which is important to them and will be part of their income for their whole lives.
The Under-Secretary also mentioned the linking rules, which are important, but they are not widely understood. If they are to play an important part in removing the barrier to returning to work, the Government must make much more progress in publicising how they work.
Finally, I ask the Under-Secretary to correct the Department’s website. She said that it was possible to earn £86 on the higher rate of incapacity benefit, but the website says £81. I am sure that she can ensure that her website is updated.

Anne McGuire: It is not my website.

Jeremy Hunt: Well, her Department’s website.

Jimmy Hood: Order. We said earlier that we wanted to make progress, but we will make a lot more if hon. Members listen to those who are on their feet and remain in order.

Jeremy Hunt: I am grateful to you, Mr. Hood, but I do not need to try your patience any longer. On the basis of our discussion, Opposition Members will want to press new clause 13 to a vote at whatever point in our proceedings you consider appropriate.

Question put and agreed to.

Clause 16 ordered to stand part of the Bill.

Clause 17

Disqualification

Anne McGuire: I beg to move amendment No. 53, in clause 17, page 14, line 41, leave out ‘this section’ and insert ‘subsection (1)’.

Jimmy Hood: With this it will be convenient to discuss Government amendment No. 54.

Anne McGuire: The amendments enable a person to be disqualified from receiving payment of a contributory employment and support allowance if they are absent from the UK or in prison, unless regulations provide otherwise. Although they will be disqualified from receiving payment, they will still be treated as being entitled to benefit, and we need to be clear about the difference between entitlement and payment. The flexibility to make exceptions in regulations would allow us to continue to pay someone a contributory allowance where they were, for example, absent from Great Britain only temporarily.
The clause and the regulations will allow people who are absent from Great Britain for short periods, and prisoners who receive short custodial sentences, to continue to be entitled to ESA while disqualified from payment of ESA, so they will keep the underlying entitlement. That will enable us not to stop and start claims unnecessarily, wasting the time and resources of claimants and staff. We intend to make provision through regulations to limit the period of disqualification to six weeks, after which a person will be treated as no longer being entitled to the benefit.
The policy intent for prisoners is clear: the state should not maintain someone who is in prison through benefits. The provision allows us to disqualify such people for payment purposes for short periods, rather than to disentitle them. In that way, we will not waste resources by stopping and starting claims when people serve only a short sentence. Where someone is in prison for longer, however, we will use powers in paragraph 1(a) of schedule 2 to remove their entitlement to benefit altogether.
Once the period of disqualification ends, as set out in regulations, entitlement to ESA will cease altogether if the claimant is still abroad or imprisoned. However, if they are no longer abroad or in prison, the provisions will enable benefit to resume without the need for a fresh claim. Exactly the same provision applies to incapacity benefit, and it has been a feature of the contributory benefits system for many years.
We strongly believe that the benefit system should not support people who are in prison or abroad, except in specific circumstances, as they should be supported by other means. The ability to disqualify the payment of benefit when entitlement is retained is important to protect public funds.

Tim Boswell: I am sure that the Committee will be relieved to hear that I do not object to the principle of the amendments, and that I shall not advise my hon. Friends to oppose them. However, I would like a moment of the Under-Secretary’s time. First, I make the point that apparently, or overtly, the provision on prisoners has been omitted. That may have been purely a technical oversight, but she should acknowledge the role of my hon. Friend the Member for Runnymede and Weybridge in drawing attention to the fact that many of the issues involving prisoners and their benefits have been rather overlooked by the Department. It is obviously unacceptable for prisoners to receive benefits when they are in Her Majesty’s custody.
That issue prompts a slightly more substantive point, because, as the Under-Secretary made clear when moving the amendments, we are talking about short periods of incarceration. What is the position regarding available support services and the pathways to work programme? Clearly such services are not geared towards people who are resident in prison and may not be extendable to people who are in prison, but there may be cases in which they could be used—for example, with someone who has a fluctuating, explosive condition, who has been put in the cells and charged with some public order offence. There may be sensible reasons, to do with rehabilitation, for the pathways programme to continue at that point. If the Under-Secretary cannot give me a pat answer, will she consider whether that should not be ruled out? I am interested in this not in relation to the moral approbation of a crime that has been committed, but as a realistic pathway to rehabilitation. Many of us are interested in prisoners in that wider context.
I pause on only one other matter now, although we may have some comments to make in the stand part debate, which is the reference to Great Britain. The hon. Member for Inverness, Nairn, Badenoch and Strathspey has tabled amendment No. 201 to schedule 2, which raises the same issue. As we will debate that amendment later, I do not wish to anticipate or rehearse any of the comments that he might make, but I am genuinely puzzled about one point.
This country is the United Kingdom, with Great Britain and Northern Ireland. We know, and clause 60 reminds us, that we are not legislating for Northern Ireland in the Bill. That may happen either by an Order in Council or through a procedure of the devolved Assembly if it is reconstituted and takes up its powers. I simply make the point that moving to another part of the United Kingdom is not the same as moving to a UK dependency such as the Isle of Man or Guernsey; it is not leaving the UK. It is odd, therefore, that the structure of devolved government, or otherwise, seems to preclude Northern Ireland. There may be a perfectly innocent explanation for that, but I am genuinely puzzled by it. I raise this issue only for completeness, and do not make any suggestion that I wish to oppose this particular amendment, which seems entirely sensible.

Anne McGuire: I shall deal first with the Northern Ireland issue. The hon. Gentleman may have helped the whole Committee by raising this point, because it can be confusing when we talk about Great Britain, the United Kingdom and Northern Ireland. He makes the point that we are a country of union, and that Northern Ireland, Scotland, Wales and England are all part of the United Kingdom. I thought, however, that he realised that for some significant years, Northern Ireland has had its own social security system, which often mirrors—if not exactly mirrors—the provisions of our own social security system. However, the actual powers have resided in Northern Ireland. I think that I am right in saying that we have a reciprocal agreement. I know that that sounds like peculiar terminology in the context of the United Kingdom, but that is just the way it is. We have had that agreement since 1976, so it is not something new or innovative that we are imposing in the Bill to link in with the current situation. I hope that that addresses some of the issues raised. It is long held in legislation that Northern Ireland has a slight separation, but the situation often mirrors, and may well exactly mirror—I do not want to be caught out on a technicality—the social security system in the rest of the UK.

Tim Boswell: I am grateful to the Under-Secretaryfor that explanation. I suspected that it might be something along those lines, but the amendment is intended to maintain the entitlement to a benefit, not the actual payment of it, for the comparatively short period of six weeks, not least for administrative reasons. She has been slightly unclear as to what would happen if, perhaps for no more reason than taking a therapeutic holiday or staying with a sister in Northern Ireland, a claimant was to move over there. Would the benefit be maintained or lost? What would happen for the weeks spent in Northern Ireland? Would the claim not fall and be replaced with a Northern Ireland claim? We do not seek to trap the Under-Secretary, but she might like to reflect on that at length or at her leisure.

Anne McGuire: I reassure the hon. Gentleman that, because of the agreement between the social security system in Northern Ireland and that of the other parts of the UK, which I called a reciprocal agreement, people moving from one jurisdiction to the other do not lose out on any non-means-tested benefit. The situation is, in a peculiar way, unified in terms of the individual’s right to be protected.

Amendment agreed to.

Amendment made: No. 54, in clause 17, page 15,line 2, at end insert—
‘( ) Except where regulations otherwise provide, a person shall be disqualified for receiving a contributory allowance for any period during which he is—
(a) absent from Great Britain, or
(b) undergoing imprisonment or detention in legal custody.’.—[Mrs. McGuire.]

Question proposed, That the clause, as amended, stand part of the Bill.

Danny Alexander: I shall not detain the Committee long, but there are important questions to be answered about a number of the provisions of the clause. It is worth noting in passing that, under previous clauses, we have discussed a number of different rules. Failure to follow them will mean that people can have their benefit sanctioned. This clause makes provision for circumstances in which someone can be disqualified from receiving benefit at all. It mentions the power to disqualify someone from receiving employment and support allowance on the grounds of misconduct,
“the failure without good cause to follow medical advice”,
which is loose phrasing, or the failure without good cause
“to observe any prescribed rules of behaviour.”
That means that someone who has gone through the assessment process and been identified as having limited capability for work, and is therefore entitled to receive the employment and support allowance, could nonetheless be disqualified from receiving it and therefore receive no benefit at all for up to six weeks. That could happen to someone who had become of limited capability for work or who remained in that category, through their own misconduct.
The Under-Secretary has rightly made the point that provisions to disqualify someone from benefits already exist in incapacity benefit legislation. She said that the Government were seeking to repeat those provisions in the context of the Bill. I do not wish to be thought of as a pedant, but I should point out that under IB rules someone can be disqualified where
“he fails without good cause to attend for or submit himself to such medical or other treatment as may be required in accordance with the regulations”.
Clause 17 replaces that fuller wording with the term “medical advice”. Will the Under-Secretary spell out what is meant by “medical advice”? Does it mean that someone who has had a work-focused health-related assessment and refused to follow the suggestion to seek further medical help or condition management, or advice from their GP to go for a counselling session, could be disqualified for ESA?
The term “prescribed rules of behaviour” is also worryingly vague. What do the Government envisage by it? The matter was brought up in an earlier amendment. I hope that, in applying the clause, the Under-Secretary and the Government will take into account the possible effect of such rules on those with behavioural problems or other mental health conditions that might affect their behaviour. Any prescriptive sense that certain forms of behaviour are required in order to qualify for benefits could have worrying implications for people in those categories. I would welcome any further information that she could provide on that point.
There is a further question on the point about medical advice. If someone is to be disqualified for benefit for a failure without good cause to follow medical advice, to use the Bill’s language, what is likely to count as “good cause”? Who will provide the evidence that someone has failed to follow medical advice? Will it be their GP, or the doctor or other medical practitioner who is required to carry out the medical assessment?

Tim Boswell: Would the hon. Gentleman not also like to reflect on the difficulty of what happens if the person’s GP and the doctor examining on behalf of the Department take a different view about the appropriate course of medical action?

Danny Alexander: The hon. Gentleman makes a pertinent point. There might be a disagreement about medical advice. We know from our earlier discussions about the clause on work-focused health-related assessments that the attendance at such an assessment could be subject to a sanction—in other words, someone’s failure to turn up could lead to their benefit being sanctioned.
It was made clear by the Secretary of State in a letter to me, and by other Ministers, that any particular course of medical action or treatment is not subject to a sanction, yet the Bill provides that simply failing to follow medical advice will potentially be grounds for disqualification from benefit altogether. We are not simply talking about someone having their work-related activity premium sanctioned, but about their being disqualified from benefit overall.
I am sure that the Government do not intend to reverse the undertaking given on work-focused health-related assessments in the context of this clause.None the less, the rather vague language used about the severe penalty of disqualification from benefit warrants a little more of the Committee’s attention, so I look forward to the Under-Secretary’s response.

Tim Boswell: I think that the Under-Secretary will probably shortly be telling us that the clause is again about delinquency or a wilful refusal to follow the rules. In that, we can be sympathetic to the Government’s position. Equally, I find my notes on the clause in sympathy with the comments by the hon. Member for Inverness, Nairn, Badenoch and Strathspey. I suppose that the answer to both is that we need to strike the right balance with the right kind of consultation to ensure that the rules work.
I, too, have some points that I would like to emphasise. First, we should check the coverage because it appears that the disqualification rules are not confined to those on the employment component and could apply also to those on the support allowance. I think that Ministers might need to reflect on that because once somebody has limited capacity for work, they are within the frame, and if they are unable to participate in work-related activities, they would move on to the support component. I cannot see how that sensitive route is excluded by the clause.
My second concern relates to serial disqualification. The Minister has made it perfectly clear that the intention is to deal with a short-term situation, but as far as I can see, there is nothing in the clause to stop an officer taking the view that somebody should be disqualified and then disqualified again, as it were, indefinitely. Will she respond to that point?
Following on from that, I am concerned about the definition of misconduct, particularly if relations with the claimant are bad or, to be honest, if the official has a bee in their bonnet. It would be arguable, although I would think not in this Committee, that somebody with a condition induced by smoking or the misuse of drugs such as cannabis might well have a psychotic condition that has resulted in their limited capacity for work. We can all take different views about the balance between deploring or even trying to sanction such behaviour and being understanding, but the general spirit of the Committee is to try and take people as they are and to work with them to get them back into the labour market.
I am genuinely concerned that somebody might within the rubric of the clause be able to say, “It is your own fault that you have got yourself into this position of being unable to work”. Let us take obesity: “You are a very fat slob and should not be in that position, but now you cannot work.” I do not think that that is what the Under-Secretary is targeting in the clauses, but I would like her assurance that that is the case.
I shall move on to the underlying concerns of the hon. Member for Inverness, Nairn, Badenoch and Strathspey, which I too have flagged up. Let us consider people with conditions that are somewhere between the medical and the social. I am thinking about addictions, whether to alcohol or drugs, or—I make a distinction between these—mental health conditions that might well fluctuate. Those are certainly medically relevant conditions, but they concern the person’s behaviour as well as medical condition. It would be quite wrong to think about disqualifying, because of misconduct, people who had a serious drink or drugs problem and whom one is trying to help through pathways. The references to “medical advice” and “without good cause” might make that easier, although it is difficult to know how we tie that down or determine how far it is being complied with.
In all seriousness, the Under-Secretary will be aware that many people who have got into such a situation might lead pretty chaotic lives. In the great scheme of things, it might be their fault, or they might have contributed to their own difficulties. That might well be true and the origins or the pattern of difficult behaviour might go a very long way back, but to remove a benefit for six weeks because of misconduct might not be the most fruitful thing to do, or the fairest.
I hope that the Under-Secretary will reflect on that balance and respond to the concerns that have been expressed. In no sense does anyone here wish to subvert the intention to stop delinquency, but it is important that the provisions are tied down to that and not to wider considerations.

Anne McGuire: I am pleased that the issues have been aired, because that allows us to deal with some of the concerns that have been raised. I hope that I can, once again, give some comfort to Committee members.
The hon. Member for Daventry (Mr. Boswell) asked whether people with mental health conditions would feel as though they were being victimised by the clause. I reassure him, and other colleagues too, that we will not disqualify any claimant without taking into account all the relevant factors, such as the likely impact of an illness on their ability to understand and comply with advice and evidence from their own medical practitioner, or without giving them the opportunity to explain their position. I must reiterate the words “good cause”. Disqualification takes place where there is no “good cause”. I hope that the hon. Gentleman will have appreciated, as we have progressed through the Bill, that we recognise the seriousness of people’s fluctuating mental health conditions.
Medical advice and treatment has been a part of IB for many years. The IB legislation contained the words “medical treatment” and that has never caused any great concerns. I hope that hon. Members recognise that we would not anticipate using this power in any overwhelming way.
I think that the hon. Member for Daventry was backing up comments made by the hon. Member for Inverness, Nairn, Badenoch and Strathspey about whether people could be disqualified if they did not take advice to give up smoking or lose weight. If that were so, a lot of Committee members would not qualify for our jobs. No names, no pack drill. We are not anticipating using the power in that way; we would use it only where, for example, a claimant disregarded without good cause advice from their general practitioner or hospital specialist regarding generally accepted, reasonable and non-invasive treatment that would significantly improve their condition. The GP will determine the medical advice, although it will be an issue for Jobcentre Plus advisers to decide about whether there is good cause to disregard that advice.

Danny Alexander: I welcome that clarification. However, if someone failed to follow medical advice offered by a GP or another medical practitioner on a work-focused health related assessment, which is considered reasonable as Ministers have described it, would their GP then have to make an assessment? How would it work in those circumstances?

Anne McGuire: To a certain extent, perhaps we are talking at cross purposes. The powers under the clause are intended specifically to deal with those people who wilfully or intentionally try to get round the regulations relating to the new employment and support allowance by not following standard medical advice. For example, someone may not take their medication to manage their condition, which would put them in a worse medical condition than if they had followed standard advice.

Tim Boswell: The Under-Secretary of State has made it clear that the basic responsibility for medical advice lies with the claimant’s GP. As I understand it—she will disabuse me if I am wrong—that advice is privileged between the GP and their patient who is, for this purpose, the claimant. Therefore the personal adviser, or the person who has conducted a work-related health-focused assessment, has no locus in the matter. It would be an entirely private matter if the GP said, “You should no longer take these drugs or you should take more of these drugs,” and the person failed todo it.
I fully understand the Minister’s assurance that this may be a precedence in IB and may never have given rise to any problems, but there is the potential of a confidentiality problem. Of course, if someone conducting an assessment on behalf of the Department sees an acute medical condition, they have a professional duty to draw that to the attention of any medical adviser in the patient/claimant’s best interests. There is at least a sensitivity there. The Minister may like to reflect on how this will be tied up and who best will carry it out.

Anne McGuire: I thank the hon. Gentleman for his comments. As usual, he makes an important point. I am please to be able to give him the reassurance that obviously there is an issue of confidentiality. There is the issue of customer consent to information. It has to be informed consent. I appreciate that that is one of the issues that I mentioned earlier about whether someone fully understands what they are giving consent to. It is for the general practitioner to send Jobcentre Plus the information relevant to the benefit entitlement, not some of the wider issues that may affect the individual. Just for the record, I point out that for the work-focused health-related assessment, non-participation is equated to a sanction, not a disqualification. It would be best to get the terminology right.

Adam Afriyie: Will the Minister give way?

Anne McGuire: I had hoped to make slightly more progress.

Adam Afriyie: I appreciate the Minister’s generosity in giving way. I seek reassurance on one small point. If a disqualification is forthcoming under the clause, is the claimant entitled to appeal and, if so, under which legislation?

Anne McGuire: I can reassure the Committee that where there is a sanction or a disqualification, there is always the right to an independent appeal. That is just the way the system operates. I should reiterate for the sake of clarity that this is about non-participation without good cause in the prevailing circumstances. The hon. Member for Inverness, Nairn, Badenoch and Strathspey was worried that if someone came in and was obstreperous or did not appear to be following the normal modes of behaviour that would somehow lead to a disqualification.
This is about misconduct that leads to an injury or refusal to follow health and safety advice, for example. That is what is intended under the clause. Although a number of organisations have expressed some concerns, I hope that the Committee will accept my reassurances that there will be adequate training for staff and safeguards will be put in place so that customers are always given the opportunity to explain their actions before any disqualification occurs.
We will use the power in the clause to disqualify benefit where a customer persistently fails to follow acceptable rules of behaviour, for example, where they fail to provide their address so a review of benefit entitlement cannot be undertaken. It has been a feature of incapacity benefit since 1996 when the incapacity benefit rules were initially drawn up. We want to maintain confidence in the system and protect it from abuse. The clause allows us to do that. I recognise the concerns and I hope that I have allayed some of the fears.

Question put and agreed to.

Clause 17, as amended, ordered to stand part ofthe Bill.

Clause 18

Pilot schemes

Danny Alexander: I beg to move amendment No. 45, in clause 18, page 15, line 5, leave out ‘24’ and insert ‘60’.
I do not have a great deal to say about the amendment. It is designed simply to probe the Government’s intentions in respect of pilot schemes. I would like the Under-Secretary of State to explain her thinking on the amount of time to be allowed for those schemes. The Bill as drafted allows regulations for pilots not to exceed a specific period of 24 months. Will the hon. Lady spell out why she thinks that two years is the right period for a pilot, given that there is evidence that longer pilot schemes allow more time for the evaluation and understanding of their outcomes?
With those extremely brief words, I look forward to the Under-Secretary’s response.

Anne McGuire: I am not aware of any great evidence that we need longer than 24 months, but if the hon. Gentleman wishes to present such evidence we will be delighted to consider it.
Our experience has shown that 24 months is a suitable period to review the progress of pilots and to test new approaches to welfare. I am pleased that this is a probing amendment; if the period were 60 months, it would be not so much a pilot as a sentence.

Danny Alexander: I introduced the amendment very briefly as the Minister will have some well-prepared responses, but the Bill states “not exceeding 24 months”; “not exceeding 60 months” would give the Government more flexibility, which I am sure they would welcome.

Anne McGuire: The flexibility is built into the Bill because if we need to extend a pilot beyond the 24-month period, clause 18(7) allows for replacing one pilot with another, which would be dependent on Parliament’s approval. If it went up to five years it would stultify the pilot rather than encouraging us to learn from it. In the spirit in which the amendment was tabled, I ask the hon. Gentleman to withdraw it.

Danny Alexander: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

David Ruffley: I beg to move amendment No. 244, in clause 18, page 15, line 15, at end insert—
‘(c) make it more likely that employers will recruit and retain such persons.’.
In the preceding debate we heard how long a pilot should be. In my calculation, the piloting of the new Labour party has been going on for nine years; perhaps that pilot will end next year when the Chancellor of the Exchequer takes over, but who knows?
In the clause and the amendment there are powers to pilot most of, but not all, the provisions in the Bill. The piloting provisions are intended to allow for different variations in the conditionality regime in order to understand what works best to help ESA claimants, and we all agree with that. As the Bill rightly focuses on the obligations of the individual as part of the rights and responsibility agenda, the amendment probes for more information on how employers will be engaged in the process of helping claimants get from welfare into work.
As well as the roll-out of pathways, the welfare reform Green Paper also refers to the piloting of a new initiative in cities—the so-called city strategy—to bring partners to work together to improve the chances of claimants getting into work. As the Green Paper pointed out on page 75, it will entail more effective engagement of local employers. The Disability Rights Commission’s response to the Green Paper suggested that employers in city strategy areas could recruit more people from IB through Jobcentre Plus and its providers promoting work trials more extensively, and through local government agencies using their procurement powers to extend the range of employers that recruit disabled people. In pushing the amendment, I ask the Under-Secretary what she understands by the city strategy agenda to get employers more involved, and how the piloting of new ways of taking people off IB will work.

Anne McGuire: The hon. Gentleman raises an interesting point, because there must be engagement with employers—the people who will provide the jobs. My hon. Friend the Minister for Employment and Welfare Reform and I have met employers not only in the proposed city strategy areas, but in other areas throughout the country, to discuss how they can play their part in making welfare reform work. For too long, the business community thought welfare reform was a social issue, and although it has a social dimension, it is also a serious economic issue. We are trying to engage employers to ensure that they feel part of the agenda, and my hon. Friend and I have met various employer organisations throughout the country.
The hon. Gentleman asked for information about the trials that we may consider. My hon. Friend the Member for North-East Derbyshire might be interested in my answer, because with Tesco and Jobcentre Plus we are trialling a scheme in which Tesco offers work tasters for up to one week to pathways to work participants whom a Jobcentre Plus adviser refers. Tesco will help with the application and interview.
One big difficulty for people who have not been in employment, and sometimes for people who have, is how to get past the interview. If one has not been in that situation before, it can be a real confidence shaker. It is bad enough for politicians standing up in front of a selection committee, and most of us have the gift of the gab. We are used to selling ourselves, but imagine going to an interview after a long period out of work. The support is necessary, and it will include a work-taster review with the participant, adviser and company—Tesco, in this case—to identify the further assistance that may be needed to succeed at an interview.
The scheme will build on many good factors that the voluntary sector has put in place for many years. Without going into my background too much, we would provide such support as a matter of course. The Government are determined to explore the range of avenues that might lead to better outcomes, and we are working hard with employers to ensure that they think of welfare reform as an economic as well as a social issue. The two are intertwined, and it is important that we ensure that employers, businesses and companies feel part of the process.

David Ruffley: The hon. Lady has given an informative reply and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

David Ruffley: I beg to move amendment No. 245, in clause 18, page 15, line 27, leave out subsection (7) and insert—
‘(7) It shall be a duty on the Secretary of State to report to Parliament annually his evaluation of the pilot schemes.’.

Jimmy Hood: With this it will be convenient to discuss the following: Amendment No. 195, in clause 22, page 17, line 19, at end insert—
‘(1A) The Secretary of State must, on an annual basis for the previous twelve months, prepare a report to Parliament on the exercise of the power to make regulations under this Part’.
New clause 5—Reports to Parliament (No. 2)—
‘The Secretary of State shall report annually to Parliament on the employment recruitment and employment retention practices of publicly-funded organisations in respect of current and previous claimants of employment and support allowance.’.
New clause 12—Duty to report on impact of Part I on older people and others—
‘(1) The Secretary of State shall annually lay before Parliament a report on the effects of Part One of this Act on recipients of the allowance, with respect to their employment opportunities and health.
(2) The report shall describe separately the impact on—
(a) people aged over 50,
(b) people with mental health conditions, and
(c) people who have been in receipt of the allowance for longer than 3 years.’.
New clause 4—Reports to Parliament—
‘The Secretary of State shall require the Social Security Advisory Committee to report annually to Parliament on the operation of this Act.’.

David Ruffley: Amendment No. 245 asks for there to be a requirement that the Secretary of State reports annually on the evaluation of pilot schemes. What lies behind the proposal is that, while we all celebrate the early successes of the pathways to work pilot, there is still a lot more information on how it has performed that is not available in the public arena. Opposition Members are not the only people to express worry that a full-on, all-singing, all-dancing cost-benefit analysis of pathways to work will not be available until next year. The pilots have been going for some time. I am not criticising in any way some of the early successes, but it is quite a job for all hon. Members to table written questions endlessly and diligently to tease out information.
It might be in the interests of a more transparent debate if we have as much information as possible in the public realm that has come from the evaluators at DWP and the research bodies that it commissions to evaluate pathways to work and other pilots. It would be useful in that context for there to be an annual evaluation of all pilot schemes, not only pathways to work and its successors, but the other schemes that will no doubt be put in place to test work-related health assessments and much else besides.
New clause 5 seeks to flag up the importance of the employer in making welfare reform work. As the Under-Secretary of State said, that is a subject to which Ministers pay attention. I was encouraged to hear her remarks in the previous debate. New clause focuses on the requirement that we would like to see for the Secretary of State annually to report to Parliament on employment and recruitment, and employment retention practices of publicly funded employers in respect of claimants of ESA. I do not want to open up a long debate at this stage in that respect in Committee now because we must make progress. Moreover, access to work has been alluded to and will be touched on in a minute by my hon. Friend the Member for South-West Surrey. As an example of what the new clause would drill down into, I wish to remind the Committee of a DWP memo on the removal of access to work funding from central Government Departments from October 2006. It stated:
“Access to Work funding will be removed from central government departments ... from October 2006. Departments will be responsible for funding from their running costs the workplace adjustments required by their disabled staff. Central government departments can continue to use the advice and expertise of Jobcentre Plus staff. This is in line with practice in the DWP since 2003.
The ‘savings’ to the Access to Work budget resulting from this change will be kept within the programme. As a result of this change Jobcentre Plus will be able to re-focus support towards people who work for smaller employers.”
I am quoting the whole story, and I hope that the hon. Lady will give me credit for that. There is a rationale and a logic to the policy change, but it did concern Susan Scott-Parker, who asked the Secretary of State about it in a letter on 9 June. On new clause 5, how many disabled employees did the DWP support under the access-to-work arrangements until 2003? How many has it supported since 2003, when it changed its access-to-work funding regime? Could those questions be answered at the end of the debate?

Tim Boswell: Does my hon. Friend not agree that his point was confirmed when it was made clear to me that no baseline transfer had taken place? Other Departments, which are critical to delivering the Government’s agenda and setting a good example through the public sector, would therefore have no additional funds and would face the invidious choice of reproviding access-to-work funds from their running costs or finding alternative provision. Is it not particularly important, therefore, that the effects of the change on what is, after all, 20 per cent. of total employment, should be evaluated to determine whether the issue has been dealt with or whether provision has withered on the vine, with fewer disabled people able to get work through the public sector route?

David Ruffley: I am grateful to my hon. Friend, who makes a typically powerful and eloquent point. I am sure that the Under-Secretary will want to respond to his point and mine, which are closely related.
New clause 12 would require that the
“Secretary of State shall annually lay before Parliament a report on the effects of Part One of this Act on recipients of the allowance”.
Subsection (2) suggests that the
“report shall describe separately the impact on...people aged over 50”—
older workers or potential workers—
“people with mental health conditions, and...people who have been in receipt of the allowance for longer than 3 years.”
Those groups are singled out for a reason. We must remind ourselves that the aim of the Green Paper was not merely—I say “merely”, but this is asking a lot—to get 1 million people off the incapacity benefit roll and bring it down to 1.7 million claimants by 2016. The Green Paper also set out two other noble objectives, which were not so time limited. One was to get1 million more older workers into employment, while the other was to get about one third of a million lone parents off benefits. The Bill is designed to achieve those important aims.
The reference in the new clause to people over 50 is important because most of us feel that not enough reference is made to older people. We must remind ourselves that just under half the existing stock—48 per cent.—are over 50 and below the age of retirement. They form quite a large proportion of the IB case load, and we must not forget them. I remark parenthetically that the interests of this large group of our fellow citizens have been flagged up in the past couple of weeks by the Leader of the Opposition, my right hon. Friend the Member for Witney (Mr. Cameron), in a well received and widely reported speech. I hope that Ministers will join us in highlighting the need to do even more to get more support for those people over the age of 50 so that, when they are able to, they can get back into work, as so many we know wish to do.
Age Concern, which we all agree does marvellous work in highlighting these issues, has reminded me of some important statistics of new claimants, around30 per cent. of which are by people who are over 50. That proportion has only declined slightly in the past decade. I make no party political point; I am sure that that figure was as disappointing at the end of the last Conservative Administration. It has certainly not been improving. Only 29 per cent. of over-50s come off incapacity benefit within six months compared to35 per cent. of under-50s. Under the pathways to work pilot, this measure has increased by 9 per cent. for those under the age of 50 but by only 4 per cent. for people over the age of 50.
These statistics show that pathways to work and the current regime are doing a better job for those under, rather than over, 50. This new clause therefore draws specific attention to the fact that reporting should be made by reference not just to all claims and to the way in which the Act and the new regime is helping them, but specifically to the people over 50, because there is a differential in the performance of pathways to work for those under and over 50.
I will not detain the Committee with statistics; the exact quantum might be disputed. However, statistics show that almost 1 million older people want to get back into paid work—part-time or full-time—and that this under-employment of older citizens costs the United Kingdom economy billions of pounds a year. I know that that is something that Ministers and officials will concede. The new clause seeks to focus with laser-like intensity when Ministers come to report to Parliament to talk specifically about the effect on those over 50.
The same arguments could be made in reference to subsection (2)(b) of the new clause, which refers to those with mental health conditions. Is the number of those with mental health conditions coming off the new allowance and getting into work higher or lower than the average? What about those who have been in receipt of the allowance for more than three years? How are those further away from the labour market performing compared with the average?
We need that information teased out in an annual report so that we can all see it in a handy and useable way. We can all go to the Vote Office and pick it up without the tedious preface of putting down large numbers of written questions. Such information should be openly available and I hope that any Government of any political persuasion would want the rays of transparency shone on this particular area.
We need to know not just what the new regime—that this Bill will usher in—will do for the general stock, but whether it will get 1 million people off the current stock of 2.7 million. What sorts of people will be coming off the stock and being helped? We need to disaggregate the off-flow. It is as simple as that and this new clause will achieve that.
New clause 4 is very much in tune with the preceding amendments to which I have spoken in that it would require the Secretary of State to procure a report to Parliament on the operation of this Act from the Social Security Advisory Committee. This new clause is slightly different in intent from the other new clause and amendments in the group, because it asks for a report from a body that is at one remove from the Secretary of State. We would like the Secretary of State to report, not because we do not trust his or her bona fides to produce good information but, as a belt-and-braces approach. Having the Social Security Advisory Committee report to Parliament as well as the Department seems to me a valuable safety net. By requesting the Government to provide reports or procure them from arm’s-length bodies, we want the evaluation to be transparent, whether it is of piloting or the general operation of the legislation.
Before I conclude, I shall give an example to flag up why we need to delve deeply into some of the evaluations that are likely to come out before 2008. Our old friend the Police Complaints Authority will be not so much piloted as subject to dummy and parallel runs. The Rethink organisation has rightly pointed out that Atos Origin will run the current and new tests side by side, and, more importantly, that it will be analysing customer satisfaction surveys in 2007. It sounds reasonable, on the face of it, that there should be an evaluation of how well the dummy runs are operating—we all have an interest in knowing how the assessments in clauses 8 to 10 will operate in practice—but as Rethink pointed out, not many claimants are likely to complete the surveys after spending time at an assessment centre. They might have other things on their minds. [Interruption.] The hon. Member for Glasgow, North-West (John Robertson) is speaking from a sedentary position. Does he wish to intervene?
It is suggested that such surveys are an inappropriate way to gather the views of many claimants, including those with learning disabilities, such as autistic spectrum disorder, and those with difficult mental health problems. People with literacy problems might also be excluded from participating efficaciously in the surveys, which we expect to form a key part of the evaluation. Some of us who have noted those observations think that there should be a more objective evaluation procedure. If that is put in place, we certainly want to know about it in the annual report, so that the annual reports to whichthe amendments refer explain exactly who has done the evaluation over what period and what the results are.
I sense that Government Members are getting a bit restless, but I hope that they have taken my observations on board. To sum up, we are calling for greater transparency and a greater call to accountability for Ministers, whoever they are, so that Parliament can access, in a more user-friendly way, information on exactly how these critically important proposals and the new regime will operate.

Danny Alexander: I shall speak briefly in support of amendment No. 195 and new clause 12. The amendments concern the public interest and the way in which the operation of the Bill and various aspects of it are monitored. They are not so much about the convenience of Members of Parliament, although that is significant, as about making information much more widely accessible to the general public. The publication of reports by the Department will provide an opportunity for members of the public to scrutinise the operation of the Bill much more carefully.
Amendment No. 195 requests a report to Parliament by the Secretary of State on the operation of the powers to make regulations under the Bill. It has been noted that there are a huge number of regulation-making powers in the Bill, covering a wide range of matters. We shall turn in a later clause to which of them will be subject to the affirmative resolution and which to the negative resolution procedure. Considering their vast range, an annual report to Parliament on their use would be a useful addition to the body of information available to Parliament and to the general public on the Bill’s important provisions. Draft regulations have not been available to the Committee in relation to many of the powers, so it has been hard to consider all of them in detail, although the Under-Secretary will agree that we have considered a number of them in considerable detail.
The hon. Member for Bury St. Edmunds made an important point on new clause 12 about reports on the scheme’s impact on older workers. Age Concern’s work is valuable in that respect and suggests that older workers have not benefited as much as other categories from pathways to work. The point has been made that a substantial part of the Government’s target of getting 1 million people off incapacity benefit in a 10-year period could be met simply by waiting for recipients of incapacity benefit and who are over 55 for men or 50 for women to reach retirement age. There are 1 million people in that category and when they reach retirement age, they will come off the benefit. The Department is therefore a long way towards meeting its target. It is not an onerous target, but thanks to the body of people on benefit, the Department is a lot closer to it than might be suggested. As the hon. Gentleman said, that should not lead to people over 50 being given less good access or less preferential treatment in pathways to work. Reporting to Parliament on that would be a useful way to ensure that the Government are regularly held to account.
New clause 12(2)(b) relates to reports on progress in relation to people with mental health conditions. It is important to remind the Committee that the evaluation of pathways to work carried out by the Institute for Fiscal Studies has found that, among people whose first reason for claiming benefit relates to mental health, there is no statistically significant difference in outcomes compared with what might otherwise have happened. That is an important point, because pathways to work is widely praised as being successful. Indeed, the evaluation shows that, for many categories of benefit recipients, it has been successful in achieving job outcomes. However, for people in the mental health category, it has not proved so successful. There might be a wide range of reasons for that, and the Under-Secretary has addressed them in previous remarks, but they should be addressed. It is not good enough to say that pathways generally works well, even though it does not for certain people, particularly considering that we are referring to the group that is the largest cause of new claims.
A specific annual report to Parliament on how welfare to work help is operating for people with mental health conditions would be a useful way to hold the Government to account for how the scheme is working for those for whom it has not been seen to be so successful. The point about longer-term claimants is relevant in that regard. I hope that the Under-Secretary will address the matter in her response, to which I look forward.

Jeremy Hunt: I see in front of me a sea of weary faces, so I shall make my comments brief. I wish to make one comment on new clause 5. There is a huge opportunity—[Interruption.]

Jimmy Hood: Order.

Jeremy Hunt: There is a huge opportunity for the Government if we are trying in the Bill to change employers’ attitudes to employing disabled people. The Government are the biggest employer with 1.3 million employees in the NHS alone. Not only that, but they issue contracts worth £120 billion every year to private and voluntary sector providers. They have a real opportunity for an easy win by ensuring that they transform their recruitment policies. Their record has got better, but it is still not as good as it should be overall: 4.5 per cent. of civil servants are disabled, compared with 19 per cent. of the working-age population. That is an average figure and, in some Departments, the percentage is lower than that. In the Department of Health, for example, which one would think would understand such issues, the figure is only 3.3 per cent. In the Scotland Office, it is zero, but I do not know whether that is because it has a small number of employees and that the sample size is very small. The point is that there are some low percentages. Presenting a report annually to Parliament, as new clause 5 would require, would put pressure on Governments of all colours to ensure that they make progress in this important area.
I conclude by reminding the Under-Secretary of a response that I received from the Financial Secretary to the Treasury in reply to a parliamentary question on25 July. He said:
“Public procurement law includes a provision enabling contracting authorities to reserve contracts for supported businesses and factories employing more than 50 per cent. disabled people.”—[Official Report, 25 July 2006; Vol. 449,c. 1352W.]
There is an opportunity even under existing legislation for the Government to do a lot more and the proposal in new clause 5 that an annual report should be presented to Parliament would be the catalyst to make that happen. I commend the new clause to the Government.

Anne McGuire: Many questions have been raised and I will go through them, but first I want to pick up some general issues that have been alluded to.
I want to make it clear that when we are talking about the number of disabled workers in any organisation, we must recognise that disability is a voluntary declaration. Hon. Members will recognise that when we publish figures in response to parliamentary questions on the number of disabled members of staff, we always make it clear that that declaration is voluntary. For all sorts of reasons, we must recognise that people may not wish to declare themselves disabled. That is a particular issue, as the hon. Member for Daventry will recognise, for those with mental health conditions. I make that caveat at the beginning of my comments.
On access to work, I am glad that the hon. Member for Bury St. Edmunds gave me the opportunity to address some of the issues concerning access to work. The letter that he read out clarifies the position, but perhaps not quite in the way that he might have expected.
When the Prime Minister’s strategy unit reported in January 2005, it made a series of recommendations, one of which was that if disabled people are to be truly considered part of mainstream employment, we should look at opportunities and options for their employment cost to be part of mainstream employment costs. The DWP, as the hon. Gentleman graciously highlighted, has blazed a trail with that because we have absorbed the cost that would previously have been met bythe access-to-work scheme. We seriously think that Departments should assume the responsibility for access-to-work provision in their employment budgets. Saying that disabled people may have specific support requirements and that they should be considered as part of employment costs is a beacon to other parts of the employment market. It is to be applauded, not to be criticised.
Having said that, I recognise that concerns were raised about the recruitment and retention of disabled workers in the Government estate. The Office for Disability Issues has given a commitment to the major charities and players in the lobby to monitor and evaluate the impact that the withdrawal of access to work will have on employment and retention. We do that in the context of another element of Government legislation, which I know the Opposition support: disability equality schemes. We are not talking about something that has come from nowhere, but about something that was part of a well regarded and well respected Prime Minister’s strategy unit report that clearly highlighted the way to equality.
It is justifiable to expect an enormous Government employer across the board to take in some of those employment costs, because if we are truly to get disabled people recognised for what they can do and not for what they cannot do, we must start to think about how we support them in employment. Government can lead the way on that.
The other part of the equation is also important. Opposition Members and, indeed, some of my hon. Friends have made it clear that some of the challenging work in the employment of disabled people must be undertaken with small and medium-sized enterprises, where the majority of new jobs are. That is why we are clear that the access-to-work budget will be recycled into the system to support disabled people in SMEs— we are talking about £2.5 million or thereabouts—because that is where we need to make the breakthrough.
Mr. Boswellrose—

Anne McGuire: Before the hon. Member for Daventry comes in, may I clearly indicate to the Committee that since 1997 the access-to-work budget has quadrupled? It was £15 million in 1997 and is now £60 million.

Tim Boswell: Can the Under-Secretary simply confirm that the evaluation of the performance of public sector schemes by the Office for Disability Issues will be published?

Anne McGuire: I can give the hon. Gentleman that assurance. The Office for Disability Issues publishes an annual report, and a first annual report has been published. The information will be in the public domain. I cannot say whether we will do an all-singing, all-dancing report, but it will be in the public domain, not least because part of my role as Minister with responsibility for disabled people is to meet regularly with representatives of the lobby. These are the very issues that came up as part of those discussions.

Danny Alexander: I want to obtain a brief point of clarification. The Under-Secretary made sensible remarks about pushing access to work out, particularly to SMEs. What steps do the Government plan to take to promote access to work to businesses in that category, given the relatively low level of awareness among many small businesses about access to work?

Anne McGuire: There is a bit of an urban myth that we somehow hide access to work under a DWP bushel somewhere. We do not, and it is well used. I think that about 35,000 people use access to work on a regular basis. That includes what might appear to be quite minimal support in the form of equipment through to support staff and all sorts of fairly sophisticated adaptations. If I had a pound for every time that access to work was mentioned at enormous gatherings, I would be quite a rich woman. It is not hidden away and we are pleased to be able to announce that access to work is in place.
The hon. Member for Bury St. Edmunds made great play of accountability and spoke passionately about ensuring that the figures are in the public domain. My hon. Friend the Minister looks forward to the third Wednesday of every month when the Office for National Statistics publishes exactly the sort of figures that the hon. Gentleman is looking for. There is no need for parliamentary questions on some of those figures because the ONS publishes them every month—both the off-flows and on-flows to incapacity benefits. The figures are not hidden; they are in the public domain. There might still be a need for parliamentary questions to tease out some background information, if that is what he wishes, but the ONS does that job and it does it with robust independence, as he will be aware from his days as an adviser in the Treasury. The figures are not ours. They are independently scrutinised and put in the public domain.
The hon. Gentleman made an important pointabout older workers. Earlier in October we introduced a new legislative framework aimed at ending age discrimination. It has opened up opportunities for older people and will progressively open up more. My hon. Friend said that over the last year, some 200,000 over-50-year-olds have moved into jobs. That is a significant change.
On disabled people moving into employment, I think that the figures show that we are on the right track. There is still a lot to do, hence we are keen to promote pathways to work with the voluntary sector. However, the inactivity rates for disabled people have reduced dramatically since 1998—they have come down by about 10 per cent. We are seeing the same trend again. Of course, there are areas in which we have a significant amount to do, not least among people with learning disabilities who fall way behind in employment opportunities.
I want to give a detailed rebuttal—I hope—of some of the points raised. By removing subsection (7) of clause 18, as proposed in amendment No. 245, we would prevent the extending of a pilot beyond the original 24-month period and replace it with a duty to report to Parliament. Although I understand the desire for scrutiny, as I have said, Standing Committees do not sit in isolation and there are various ways in which information and the activity of any Department can be scrutinised.
I am not convinced by the arguments of the hon. Member for Bury St. Edmunds about needing the Secretary of State to submit a separate annual report to Parliament. We have a Select Committee process and the Social Security Advisory Committee—also independent—which reports annually. Those arrangements work very well and I think that there would be a danger of over-reporting to no apparent end when we already have pretty good procedures in place. We often talk about over-regulation and overburdening the private sector, but dare I suggest that there is a danger that new clause 5 would increase the burdens on the public sector by asking for additional reports? I should highlight the fact that Departments will have to report annually on their progress under the disability equality schemes.
New clause 12 relates to the over-50s, those with a mental health condition and those who have been receiving benefit for more than three years. I repeat yet again that the Government are determined to ensure that the support on offer alongside ESA is relevant and useful to every individual, whatever their personal circumstances. We are clear that that is the philosophy underpinning the pathways-to-work approach; it is about looking at individuals as individuals, not as part of a group or a selection of statistics, as we did in the past. The results from pathways have vindicated that approach.
I ask Opposition Members to reconsider their provisions. All our regulations, all our work and all our statistics will be in the public domain. We have nothing to hide in terms of our approach and we welcome constructive criticisms about how we can improve. Indeed, we welcome the discussion in this Committee, which has been constructive not just for the most part, but almost exclusively.
We have reporting means in place, which have served us well. They are independent, and involve everyone from the ONS to the Social Security Advisory Committee. I therefore ask the hon. Gentleman not to press his provisions to a vote.

David Ruffley: I am grateful to the Under-Secretary for her comments. Although I do not accept for a minute her argument that the provisions would lead to information overload, I am prepared not to press the amendments and new clauses, save for new clause 12, which I understand can be voted on at a more appropriate point in our proceedings. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 18 ordered to stand part of the Bill.

Clause 19

Relationship with statutory payments

Anne McGuire: I beg to move amendment No. 55, in clause 19, page 15, line 36, leave out ‘employment and support’.

Jimmy Hood: With this it will be convenient to discuss Government amendments Nos. 56 to 62

Anne McGuire: I hope that we do not need to spend too much time on the amendments. They ensure that the description of the contributory employment and support allowance in the clause, which deals with the relationship between ESA and statutory payments made by employers, is consistent with the description in the rest of the Bill so that we avoid any possible confusion. They tidy up the drafting, and I hope that the Committee will accept them in that spirit.

Amendment agreed to.

Amendments made: No. 56, in clause 19, page 15,line 40, leave out ‘employment and support’.
No. 57, in clause 19, page 15, line 42, leave out ‘employment and support’.
No. 58, in clause 19, page 16, line 2, leave out ‘employment and support’.
No. 59, in clause 19, page 16, line 4, leave out ‘employment and support’.
No. 60, in clause 19, page 16, line 8, leave out ‘employment and support’.
No. 61, in clause 19, page 16, line 10, leave out ‘employment and support’.
No. 62, in clause 19, page 16, line 13, leave out ‘employment and support’.—[Mrs. McGuire.]

Anne McGuire: I beg to move amendment No. 63, in clause 19, page 16, line 13, at end insert—
‘( ) Except as regulations may provide, a person who is entitled to additional statutory paternity pay is not entitled to a contributory allowance in respect of a day that falls within the additional paternity pay period.
( ) Regulations may provide that—
(a) an amount equal to a person’s additional statutory paternity pay for a period shall be deducted from a contributory allowance in respect of the same period,
(b) a person shall only be entitled to a contributory allowance if there is a balance after the deduction, and
(c) if there is such a balance, a person shall be entitled to a contributory allowance at a weekly rate equal to it.’.

Jimmy Hood: With this it will be convenient to discuss Government amendments Nos. 64 and 65.

Anne McGuire: The purpose of the amendments is to ensure that the contributory and support allowance treats the additional statutory paternity pay in the same way as other similar statutory payments made by employers, such as statutory maternity and adoption pay. The amendments set out in detail the relationship between the contributory employment and support allowance and statutory payments.
The additional statutory paternity pay is a new statutory payment paid by employers to employees which was introduced by the Work and FamiliesAct 2006. A decision on when the new scheme will be introduced is yet to be made, but we need to ensure that the ESA can take account of that. The regulations that we will make under the clause will provide that where a claimant is receiving one such payment from their employer, it will be deducted from the contributory employment and support allowance under the overlapping benefit rules. Those arrangements arethe same as those for incapacity benefit. I therefore ask the Committee to accept the amendment.

Amendment agreed to.

Amendments made: No. 64, in clause 19, page 16,line 14, at end insert—
‘“additional paternity pay period” has the meaning given in section 171ZEE(2) of the Contributions and Benefits Act;’.
No. 65, in clause 19, page 16, line 15, leave out ‘the Contributions and Benefits” and insert ‘that’.—[Mrs. McGuire.]

John Robertson: I beg to move amendment No. 141, in clause 19, page 16,line 18, at end insert—
‘(6A) In relation to a claim for an employment and support allowance, regulations under this section may make provision for—
(a) an assessment to be made to identify all statutory entitlements and allowances to which a claimant is entitled;
(b) notification to a claimant of their statutory entitlements;
(c) advice to a claimant on how statutory entitlements may be claimed.’.
I welcome you back to the Chair, Mr. Hood, as everyone else has. It is a pleasure to have you here. Considering the time, I am sure that everyone is feeling hungry; I noticed that some Opposition Members were getting a bit tetchy, which may not be surprising. I am afraid, however, that I shall speak to the amendment at some length, as I have a number of points to make. Perhaps I will get through my introduction before we break either for dinner or for a Division in the House.

Tim Boswell: Will the hon. Gentleman give way?

John Robertson: You have got me there.

Tim Boswell: This is a genuine effort to assist the hon. Gentleman. He will note that the amendment has been signed by members of the Committee from all political parties. I give him advance notice that we probably will not want to speak to it, unless there is some omission in his speech.

John Robertson: I did notice that the amendment, which I move on behalf of myself and my hon. Friend the Member for Dumfries and Galloway (Mr. Brown), has attracted several names. The hon. Member for Inverness, Nairn, Badenoch and Strathspey, whom we now call the Liberal one, has put his name to it, as has his missing friend the hon. Member for Yeovil (Mr. Laws) and the hon. Member for Daventry. I like to think that that is not because I am moving it, but because it has much merit and covers a great deal of information that all Members feel that the Government should take on board and address. Having said that, it is a probing amendment, on which I seek answers and some fears to be allayed.
I particularly want to know what more Jobcentre Plus will do to inform all ESA claimants of all relevant benefits for which they are eligible when assessing their claims. Macmillan, Citizens Advice and the Disability Benefits Consortium have all raised similar concerns with me and support the amendment, as do Opposition Members. I want to ensure that ESA applicants are informed of all the relevant benefits, particularly disability benefits, for which they are eligible when they make their ESA claim at Jobcentre Plus.
Why introduce such a duty on Jobcentre Plus? People with cancer need more financial support. There is a wealth of evidence that cancer leads to a significant fall in income and imposes considerable additional costs on people. For example, Macmillan Cancer Support found that, among the under-55s, seven out of 10 suffer a loss in household income with an average fall of 50 per cent. The lack of information about benefits cause people with cancer to miss out. The National Audit Office found that 77 per cent. of cancer patients are not given information about available financial support.
The benefit advisers at Macmillan Cancer Support report that Jobcentre Plus staff rarely inform cancer patients about disability and carer service benefits, even when their entitlement to incapacity benefit demonstrates a potential eligibility for disability benefits. The scripts used by Jobcentre Plus call centres do not inform claimants about disability benefits. The onus is usually on the claimants to inquire whether they are entitled to them. As a result of the lack of information, too many cancer patients are missing out on vital disability benefits that cannot be backdated. They also miss out on extra income support, housing benefit and other entitlements that can result from a successful claim for disability living allowance.
Let me give an example. In September 2006, a cancer patient aged 38 visited Jobcentre Plus at Wythenshawe to find out what she was entitled to. She was told that, because she was receiving statutory sick pay, she would not be entitled to any benefits. She approached Macmillan immediately afterwards and was helped to claim disability living allowance that also entitled her to income support and help with housing costs and council tax. Misinformation about benefits also causes cancer patients to miss out. Advisers at the Macmillan helpline have identified the lack of information or misinformation by Jobcentre Plus as a major theme among its cases.
People need all the information available the first time that they contact Jobcentre Plus. I welcomed the Minister’s remarks to the Committee on 17 October that claimants would receive face-to-face benefits advice on their first work-focused interview eight weeks after their claim starts. However, having such advice at that point in the process would mean that people who were entitled to additional benefits would have already missed out on much-needed money, which in most cases cannot be backdated.
Furthermore, those in the support group will not attend work-focused interviews at all so, under the current proposals, they will have not have access to any of the benefits advice. Is that so, and what does the Under-Secretary intend to do to stop it happening? Ministers have recognised the Government’s need to do more to improve benefits awareness and take-up, and both Ministers have said repeatedly that more needs to be done to improve awareness and the take-up of benefits. For example, the issue was raised by my hon. Friend the Member for Keighley (Mrs. Cryer).

Sitting suspended.

On resuming—

John Robertson: Because I have lost my place, I shall start again from the beginning. I know that everyone was riveted by what I was about to say. I was in the process of going through various reasons for the amendment.

Adam Afriyie: I welcome the amendment, especially on the basis that it is a catch-all amendment. It will catch not just claimants with terminal cancer but claimants with any terminal disease. Will the hon. Gentleman confirm that the intention is to catch all claimants with a terminal illness?

John Robertson: I thank the hon. Gentleman for his intervention, and the answer is in the affirmative. However, the amendment was tabled not just for that reason but for many others.
I was explaining why we have to put duties on Jobcentre Plus, and I had given four reasons. I said that some of my colleagues had made contributions in the House. My hon. Friend the Member for Keighley spoke during the Second Reading debate on 24 July. In response, my right hon. Friend the Secretary of State for Work and Pensions stated that he would
“reflect on what my hon. Friend has said and see whether there is anything more that we can do...it is our responsibility to ensure that people are at least aware of the various entitlements that might be available to them.”—[Official Report, 24 July 2006;Vol. 449, c. 622.]
Ministers have responded positively to recent parliamentary questions on the issue from several MPs including the hon. Member for Billericay (Mr. Baron) and my hon. Friends the Members for Stroud (Mr. Drew), for Huddersfield (Mr. Sheerman) and for Calder Valley (Chris McCafferty). Most recently, in a Westminster Hall debate on benefits for cancer patients, my hon. Friend the Minister stated:
“I recognise that we need to improve benefit awareness.”—[Official Report, Westminster Hall, 10 October 2006; Vol. 50,c. 450WH.]
In addition, 156 MPs from all parties signed early-day motion 1553 on Macmillan’s Better Deal for Cancer Patients campaign, which includes a call for the Government to use effective referral mechanisms to inform all cancer patients about their eligibility for financial benefits.
Given cross-party support and repeated ministerial commitments to improve the current system, the supporting groups and I believe that the Welfare Reform Bill provides a clear opportunity to explain how that will be done. We believe that a key part of the solution is ensuring that employment and support allowance claimants are told about all benefit entitlements when they first claim. I ask again whether Jobcentre Plus ensures that ESA claimants are informed about other relevant benefits to which they are entitled. The Jobcentre Plus booklet “Our service standards”, which is dated January 2006, states:
“We aim to provide accurate and appropriate information and advice to help you ... understand which working-age benefits you may be able to claim”.
Staff are supposed to
“direct you to the right person or organisation if we cannot help”.
However, in reality, that does not appear to happen. Let me give another example. The current customer management system script used by Jobcentre Plus call centres does not include questions that would enable call centre operatives to identify claimants who may be entitled to disability living allowance or attendance allowance. Nor does it include any prompts to give information about those benefits or to refer claimants to advice services for further information about them or for a full benefits check. Some claimants are asked whether they are receiving DLA or AA, but those who say that they are not are neither asked further questions to establish eligibility nor given any further benefit information. The situation is similar for working tax credit and child tax credit. I believe that there is scope to change the scripts so that at least the customer can be made aware of those benefits and tax credits. Although I accept that that does not happen 100 per cent. of the time, once is too often, in my opinion.
New duties and procedures are needed to trigger staff to inform claimants about the full range of benefits to which they are entitled and then to signpost them to the appropriate sources of support if Jobcentre Plus cannot help. Writing an awareness and signposting role into the scripts used by contacts and centre staff is one way in which benefits awareness and take-up could be improved. Further changes could include a DWP benefits inquiry line, which could be one of the main places to which claimants are referred for a more in-depth assessment of their disability benefits entitlement and help with form filling, which is something that many claimants have problems with.
Jobcentre Plus could also use resources such as UK Advice Finder to signpost claimants to other organisations that provide specialist benefits services. Although that would not be a one-stop shop approach, it would be an improvement on the current reality faced by people with cancer or any other disability who find themselves with such problems.
Citizens Advice also raised a few points about passporting and, in particular, access to help with health costs. That merits discussion here. The ability to pay for prescriptions is linked to the ability to manage a health condition, which in turn contributes to a person’s ability to undertake work. Will new claimants receiving the contributory rate of ESA be passported to the same benefits and have access to the same grants and loans as current claimants receiving income support with a disability premium?
Citizens Advice is concerned that replacing the current income support and disability premium with a contribution-based employment support allowance will disadvantage people receiving that form of ESA. It would seem that they either would be able to access help with health costs through passporting or might only be able to do so through the low-income scheme, which requires completion of a 16-page form. The Select Committee on Health recommended in its report on NHS charges in July 2006 that the DWP and the Department of Health work together to extend health charge exemptions from means-tested benefits so that the low-income scheme can be abolished.
We do not believe that it is the Government’s intention to disadvantage future claimants of contribution-based ESA and would therefore appreciate clarification from the Under-Secretary on the aspect of the Bill before us. I appreciate that I have gone on at length, but feel that the points that I have raised are important and look forward to her reply.

Anne McGuire: I hope that I can give my hon. Friend some reassurance on his points. He is obviously right to raise the issue of information on benefits and I am happy to say to him that the DWP already provides a range of information on benefits and statutory entitlements and on how to claim them. We do that through a range of methods. Obviously, our website provides eligibility information. We provide also a range of literature such as booklets and leaflets, which are available to customers in many locations including advice agencies. I shall come on to that soon. They are available in different formats including in Braille.
Customers can access advice by contacting their local office or Jobcentre Plus direct or their benefit delivery centre. I do not know whether my hon. Friend has been in to one recently, but the new Jobcentre Plus facilities have direct access telephone lines at no cost to the customer, and people can access the benefit delivery centre easily. When notifying customers of benefit decisions, we also ensure that there is information on a range of other benefits. Information on employment and support allowance will be available at the first interview under the new arrangements, so that people can make informed choices. We must ensure that information is available at the right time and in the right place.
I say to my hon. Friend that I am not sure whether a statutory duty would add anything to the requirement that we place on Jobcentre Plus to provide information to those people who contact it. I assure him that my hon. Friend the Minister for Employment and Welfare Reform, Ministers in Departments such as the Department of Health and I meet Macmillan Cancer Support and other charities that highlight the issue of benefits information. We are working with them closely to consider how we improve access to information.

Adam Afriyie: I appreciate the comments on and intentions towards ensuring that people with terminal illnesses receive information. There is one group of people with terminal illnesses that does not receive information; notification is not triggered by the local authorities or by the Department for Work and Pensions. One of my colleagues has raised the matter in the House. However, will the Government introduce an amendment requiring that people with terminal illnesses are notified of the benefits that they can receive? One or two groups are not notified, and there is no requirement for them to be notified.

Anne McGuire: I do not want to go too far down the track of other benefits. I am not sure of the benefits to which the hon. Gentleman alludes; however, we work hard with the Department of Health and with charities such as Macmillan to consider ways in which information can be presented. That includes information prescriptions, so that when a patient is given a terminal diagnosis, they have information in front of them. It is a sensitive area, and Macmillan and the Government realise that at the traumatic point in a person’s life when they are given the diagnosis, they do not want the next discussion with a doctor to be about their entitlement to disability living allowance and attendance allowance. The matter must be dealt with sensitively, and we must also appreciate that people may not know that they have a terminal diagnosis. For many reasons, the diagnosis may be withheld from them.
We constantly consider ways in which we can make information available, through websites, citizens advice bureaux, and advice agencies such as local authorities, social services and carers organisations. We are not complacent. We recognise that we must continue to ensure that we improve the ways in which benefit advice, particularly disability-related benefits such as DLA and AA, can be delivered. It will be at the forefront of our minds when we consider the ESA and the first interviews at the beginning of the process. In light of those reassurances, I hope that my hon. Friend will withdraw his amendment.

John Robertson: I thank my hon. Friend the Under-Secretary for her statement, but I have a couple of reservations. Having a bank of information does not guarantee that it is getting out to the person who needs it. As a result of that I ask what checks and balances can be put in place to ensure that everything is above board and people can see that questions are being asked properly. I fully take on board my hon. Friend’s point that people who find out that they have a terminal illness might not ask the right questions. I would expect those dealing with such people to take their problems on board.
I reserve the right, if I do not get answers to my questions, to return to the matter on Report. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19, as amended, ordered to stand part of he Bill.

Clause 20 ordered to stand part of the Bill.

Schedule 2 agreed to.

Clause 21

Interpretation of Part 1

Amendment made: No. 66, in clause 21, page 16,line 27, at end insert—
‘“employment” and “employed” have the meanings prescribed for the purposes of this Part;”’.—[Mrs. McGuire.]

Danny Alexander: I beg to move amendmentNo. 165, in clause 21, page 17, line 9, leave out from ‘beginning’ to end of line 11 and insert
‘from the date of claim, and
(b) ending with
(i) determination of eligibility for Employment and Support Allowance, or
(ii) such day as may be prescribed up to a maximum of 91 days from the date of claim,
whichever is the sooner.’.
I shall be brief, because I know that we are trying to make some progress, as we just have. I think that we have covered more clauses in two minutes than in the previous two hours. It was an impressive piece of work.
The amendment is intended to probe the Government’s thinking on the nature and timing of the assessment phase for the employment and support allowance. It sets out that that phase should end either on the date on which eligibility for benefit is determined or after 13 weeks. Ministers have made clear that the assessment phase should last 13 weeks. If entitlement for benefit is determined before the 13-week phase is over, the entitlement should start on that date so a person does not have to wait two or three weeks before receiving the full benefit. That is a relatively simple but important point, not least to those outside the House following our proceedings. I would be grateful if the Under-Secretary would clarify the assessment phase and make it clear that it will end after 13 weeks or on the date on which a determination of benefit is made if, as we all hope, it happens more quickly.

Anne McGuire: The amendment, if I understand it correctly, would have two main impacts. It would set the commencement of the assessment phase at the point at which an individual makes a claim and the end of that phase and the movement to the main phase at the point at which the assessment process is complete, or 91 days after the claim was made if the assessment is not finished. I believe that that is the correct understanding.

Danny Alexander: That is correct.

Anne McGuire: Right. With the greatest of respect, to determine the commencement of the assessment phase as the date of the claim would not be sensible. Many customers seek to backdate their claims due to a delay in contacting Jobcentre Plus that is no fault of their own. Others seek to advance their claim dates on the basis that their employer notified them of termination of contract some days down the line. We propose, through regulations, to set the assessment phase of the ESA as a 13-week period from the first day of entitlement. We have based that length on the evidence from the pathways pilots, which showed that 13 weeks is a realistic target for assessing the majority of customers. We will aim to get the assessment for every individual complete within the 13 weeks, but there might be instances where that is not possible, perhaps because of a delay in the collection of evidence or because a customer is unable to attend a medical examination. Earlier we considered examples such as when a medical examination has to be rescheduled because of illness or the one given, if I remember rightly, by the hon. Member for Windsor (Adam Afriyie) of all 246 Atos doctors being on strike on a given day. I know that was only an indicator, and that he used a somewhat flippant example.
We want to ensure that customers do not lose out if the assessment phase has to be extended for reasons such as I have described. Our proposals will also ensure that benefit is not paid to those who are not entitled to it, which would be a risk if everyone were automatically moved on to main phase even if their assessment was not complete. I hope that explanation will be accepted.

Danny Alexander: The burden of the point on which I sought clarification was fairly simple. If the assessment of entitlement to the benefit—in other words, the decision that someone is entitled to ESA—is made less than 13 weeks from the date at which entitlement starts, does the assessment phase end at that point?

Anne McGuire: My hon. Friend the Minister for Employment and Welfare Reform clarified this in earlier debates. The first phase is 13 weeks and then the customer moves on to the next phase, depending on what happens as a result of the processes during that phase. The entitlement will not start until the end of the 13 weeks. I hope that clarifies the point for the hon. Gentleman for the second time. I have nearly reached the point of asking him to withdraw the amendment.

Danny Alexander: I thought I would intervene, rather than come back with another speech for the Committee’s benefit. If the assessment phase lasts13 weeks and someone’s decisions are taken before that period ends, is it correct that they do not start to receive the full rate of benefit until the end of the assessment phase?

Anne McGuire: That is correct. There might be an opposite position. For example, for reasons similar to those I have described, someone might not get out of the assessment phase until 15 weeks have passed, and if they qualify for the support allowance, it is backdated to 13 weeks. So, 13 weeks is the threshold in respect of either having entitlement or backdating. Principally on the point of fairness, we could not have a situation where people could, for various reasons, be out of the assessment phase and move into the new benefit at the end of 10 weeks while others might not get there until 15 weeks. We anticipate that 13 weeks will be our cut-off point. In that context, I ask the hon. Gentleman to withdraw the amendment.

Danny Alexander: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Danny Alexander: I beg to move amendmentNo. 162, in clause 21, page 17, line 13, after ‘prescribed’, insert
‘, and such amounts as may be prescribed’.
I suspect that it will just be me and the Under-Secretary discussing this for a little while, but I shall try to keep the exchanges relatively brief. The amendment seeks to probe the Government’s intentions on the payments that will be made to people during the assessment phase of the ESA.
There is particular concern about payments made to younger claimants during the assessment phase. For example, there are younger age rates of jobseeker’s allowance and there have been discussions about lower rates being payable for younger claimants during the assessment phase. Will the Under-Secretary confirm that the younger age rates will be payable during the assessment phase?
There is a further concern about the availability of the disability premium. Part of the burden of this legislation is to remove the disability premium. If it is no longer payable during the assessment phase, will the Under-Secretary explain how someone aged 16 or 17 will be identified as qualifying for the higher rate of personal allowance? I shall talk a little longer to allow the Minister to think about that.
It is clear that the additional components will increase someone’s income above the basic allowance and will be made earlier. Despite that, during the first 13 weeks some people may experience a drop in income. The Green Paper on welfare reform states that more than half of new claimants for incapacity-related benefits are out of work immediately before their claim and for some groups the level of payments may be above the basic allowance. Can the Minister confirm that there will be circumstances when some people, such as those receiving statutory sick pay and those with a disability premium in previous benefits, will experience a drop in income for the 13 weeks of the assessment phase because they were on previous benefits and went on to the assessment phase, which is payable at jobseeker’s allowance rate? They may qualify for employment support allowance, at which point their benefit would rise to the higher level. Have the Government given any thought to how in such circumstances they will avoid fluctuations in income that might otherwise apply to vulnerable people?

Anne McGuire: I think I understand what the hon. Gentleman is getting at. His point allows me to confirm that we will pay a younger-age rate during the assessment phase, but we have responded to consultations arising from the Green Paper that allowed us to indicate that we would not differentiate on grounds of age during the main phase.
We are looking at a whole new system that will be more responsive more quickly to people than the current system. The 13-week threshold will mean that if people meet the criteria, they will move on to a higher level of benefit than they would currently in terms of the time scale. Obviously, we have not set the rates—I do not know whether the hon. Gentleman was trying to lever out an answer on that—but we have responded to the consultations on the youth rate arising from the Green Paper. I hope that he accepts my clarification and that he will withdraw his amendment.

Danny Alexander: I am grateful for that clarification, but the Minister has not addressed my second point. People—not necessarily young people, but perhaps adults who will be eligible for the full rate of JSA—may previously have been on other benefits before they made an application for employment support allowance. Those other benefits would be higher than the rate that the Government propose to pay during the assessment phase. Those people may be on a higher rate to start with—one could list the range of circumstances in which that would be possible—but go on to a lower rate during the assessment phase, and when they qualify after the 13-week period of employment support allowance go on to a higher rate. There would be a U-shaped curve or fluctuation in the level of benefit received. Have the Government given any thought to how they might deal with people in such circumstances to ensure that the fluctuation in income that might take place does not cause unnecessary damage to vulnerable individuals?

Anne McGuire: Our aim is to get people back into work as soon as possible. Throughout the Bill’s progress, we have had good discussions about when there can be occupational health interventions for people who have long-term sicknesses, and about all the things that will keep people at work.
We are not going to make assumptions about where somebody who moves off statutory sick pay to the first phase of ESA will end up after the process of assessment. As we have not set the rate, I am not prepared even to start a discussion on the figures. However, moving from one benefit to another is a decision that must be considered by the individual. I go back to my earlier point: we are looking at a tightly programmed assessment phase, so an individual will still be better off than under the current system over a 52-week period.
I hope that I have answered the hon. Gentleman’s questions. I am not sure that I have dealt with the exact amounts, and all the rest of it, to his satisfaction. However, if somebody moves off SSP on to the first phase of ESA, we have made it clear that that will be at the jobseeker’s allowance rate. That is the decision that people have to make.

Danny Alexander: The Under-Secretary has clarified the point. I am not sure whether I am entirely satisfied with her answer, but the issue can be debated further. The other place may well wish to take it up; I shall not be the Liberal Democrat spokesman on that occasion. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 21, as amended, ordered to stand part ofthe Bill.

Clause 22

Regulations

Danny Alexander: I beg to move amendmentNo. 196, in clause 22, page 17, line 19, at end insert
‘, subject to an assessment of their impact on disability equality, which shall be included in the report of the reporting authority under regulation 5 of the Disability Discrimination (Public Authorities) (Statutory Duties) Regulations 2005’.

Jimmy Hood: With this it will be convenient to discuss amendment No. 163, in clause 22, page 18,line 3, at end insert—
‘(8) Before making regulations under sections 8 to 15 the Secretary of State shall consult the Commission for Equality and Human Rights.’.

Danny Alexander: I shall be as brief as can be consistent with making the intentions behind my amendments clear. Amendments Nos. 196 and 163 probe the clause on issues relating to the Disability Discrimination Act 1995 and the Human RightsAct 1998, which we have discussed. We want to make the regulations subject to assessments on their impact on disability equality and subject to consultation with the Commission for Equality and Human Rights. As the Committee knows, that will shortly take over the Disability Rights Commission and the other equality organisations.
The thinking behind the amendments is that because of the importance attached to the public sector’s disability equality duty, to the 1998 Act and to the functions currently carried out by the Disability Rights Commission, it is important, given that the regulations—particularly under clauses 10 to 14—introduce a conditionality of benefits, that some mechanism should be in place. Making assessments on impacts on disability equality and requiring consultation with the Commission for Equality and Human Rights would help to ensure that before any regulations were published or dealt with, the commission could be satisfied that nothing proposed would in any way undermine the relevant duties. That would allow a degree of independent scrutiny, which would be welcome.
We have covered 1995 Act and the assessment of disability equality on previous clauses, and I am happy to leave it at that. I look forward to the Minister’s response.

Jim Murphy: I am delighted to be back for the third time today. I thank you, Mr. Hood, for the short break, which gave us the opportunity to celebrate the arrival of baby Orla in the appropriate way. It also gave me a chance to catch up with my family’s plans for Halloween night. I can tell hon. Members that I do not intend to trick them on anything, although I am certain that I will not treat them in any way either. That is the best that I could do.

David Ruffley: This is Jim Davidson standard.

Jim Murphy: I do not know whether he is allowed in the new Conservative party.

Russell Brown: It would help if you took your mask off.

Jim Murphy: It might scare the children.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey raised a number of probing questions on amendments Nos. 163 and 196. AmendmentNo. 163 would provide the Commission for Equality and Human Rights with a formal role in developing regulations. By general acknowledgment, the Government and the Department for Work and Pensions are right to be proud of our work on advancing the interests of disabled people and of our close working relationship with key stakeholder groups, including the DRC, which we created five or so years ago. Our extensive consultations on the development of our proposals for the employment and support allowance demonstrate our commitment in that regard, as does the fact that we have produced a prototype disability equality impact assessment in advance, importantly, of our statutory obligation to do so.
On the scrutiny of regulations, the hon. Gentleman will be aware that existing provisions require the Secretary of State to consult the Social Security Advisory Committee on regulations made under relevant enactments. He will be happy to be reminded that that is provided for in section 172 of the Social Security Administration Act 1992. Importantly, we have added part 1 of the Bill to the list of relevant enactments for such purposes. As the recent review has shown, those arrangements have worked well, and I am not convinced that adding a further layer of consultation of the sort proposed in the amendment would aid the making of regulations. There is, of course, the code of conduct for public and Government consultations, which we will adhere to for future initiatives and proposals.
On the principle behind the amendment, however, we are happy to confirm that we will continue to confer with the Commission for Equality and Human Rights. We have accepted that principle and demonstrated our continuing commitment to adhere to it.

Danny Alexander: The Minister rightly referred to the prototype assessment on which the Department is working. What progress has been made on it? When are we likely to see the fruits of that process?

Jim Murphy: We are putting the final touches to the prototype. We are under a statutory obligation to publish it and we certainly intend to do that before we are obliged to do so, as a continuing sign of our determination to work with stakeholders.
Amendment No. 196 is unnecessary because it repeats what will be our statutory obligations from December 2006 under the Disability Discrimination (Public Authorities) (Statutory Duties) Regulations 2005. On that basis, the issue is already covered by current law, so I think that the hon. Gentleman will accept that the amendment is unnecessary.
I can confirm that the Government will pursue the intention behind amendment No. 163 as we continue to consult external organisations, including the ones that we have just discussed.

Danny Alexander: I am grateful to the Minister for that reassuring response. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 ordered to stand part of the Bill.

Clause 23

Parliamentary control

Danny Alexander: I beg to move amendmentNo. 167, in clause 23, page 18, line 8, leave out ‘the first’.
The amendment would amend the provision on parliamentary control. The Bill states that affirmative resolutions of the House should apply only to the first regulations under clause 12 on work-related activity and the regulations on pilot projects under clause 18, and that all other regulations should be subject to a negative resolution. The proposal would delete “first” so that all regulations that relate to work-related activity should be subject to an affirmative resolution, but it is designed more broadly to probe the Government’s intentions for parliamentary scrutiny in general.
If I am not mistaken, clauses 10, 11, 13 and 14 will be of significant import. Not only should all regulations under clause 12 be subject to an affirmative resolution, but there is a good case for regulations made under the other clauses also to be subject to an affirmative resolution, as opposed to the negative resolution. I realise that such matters are a fine point of parliamentary protocol, but none the less there is a clear difference between the two.
The deletion of “first” would make it clear that all such regulations would have to subject to further parliamentary debate as opposed to being only so subjected if a resolution were prayed against. Such procedure would be more appropriate given the extent of the public interest in the way in which regulations relating to matters that are subjected to work-related activity and, more broadly, conditionality should be considered. Given my explanation of the amendment, I look forward to the Minister’s response.

Jim Murphy: My hon. Friend the Member for Ochil and South Perthshire (Gordon Banks) said earlier from a sedentary position that it would be great if all our sittings took place in the evenings given this rate of progress. Such timing certainly serves to concentrate the mind in a way that no inducement from the Whips and the usual channels has thus far been able to do. It is welcome and we should sit through the witching hour.
As for the specific issues raised by the hon. Member for Inverness, Nairn, Badenoch and Strathspey, the Bill currently provides for an affirmative debate on the first set of regulations laid under clause 12. That is so because the clause is new; clause 11 relates to pathways, so it is the innovative nature of clause 12 that has been set aside to be subject to a positive resolution.
It is not sensible for a Government to take such action, but more importantly it is not sensible for Parliament to seek an affirmative resolution in all circumstances along the lines of the hon. Gentleman’s suggestion. It is for Parliament to decide such matters through the usual channels and elsewhere, but not to place in the Bill a requirement to have an affirmative resolution on all changes to regulations. For example, on page 26 of the draft regulations, we outline what would be considered a good cause. We have said repeatedly that the good cause list is not exhaustive and that it can be added to through time, best practice and from learning what works.
I understand the intention, in terms of parliamentary protocol and control, behind putting in primary legislation the requirement to have an affirmative resolution for all changes in regulations, and it is an important intention. However, the way in which the hon. Gentleman seeks to do that is heavy-handed and unnecessary. I do not think that Parliament would thank us for giving it the opportunity to have affirmative resolutions on the change of good causes, work-focused interviews, changing the specifics on notification requested for work-focused interviews and all the things that have to evolve as we roll out the pathways scheme through the private and voluntary sectors nationally.
Although I understand the sentiment of the hon. Gentleman’s amendment, I hope that he accepts that—entirely unintentionally— it would create what would border on unnecessary and excessive use of the affirmative resolution procedure for often relatively minor changes in regulations. They have to be left to the normal practice in terms of how we change regulations to fit the evolution of delivery mechanisms. I reassure him that we understand his concerns, but his mechanism to deal with them is probably unworkable and I invite him to consider withdrawing the amendment.

Danny Alexander: I am grateful to the Minister for that response for at least two reasons—perhaps three. First, I am not sure that I have been described as heavy-handed before. Secondly, one of the disappointments in this Committee so far is that we have not heard from the hon. Member for Ochil and South Perthshire—by virtue of his position, I should add—so I am glad that his name will appear twice now in the record of the debate. I am grateful to the Minister for his reassurance, and I know that all the Opposition parties will be assiduous in scrutinising the draft regulations that are published in order to seek debates on a negative resolution when we consider them to be appropriate. With that in mind, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 23 ordered to stand part of the Bill.

Clauses 24 and 25 ordered to stand part of the Bill.

Schedule 3

Consequential amendments relating to Part 1

Anne McGuire: I beg to move amendment No. 79, in schedule 3, page 55, line 2, at end insert—

‘Social Work (Scotland) Act 1968 (c. 49)

A1 In section 78(2A) of the Social Work (Scotland) Act 1968 (which exempts persons in receipt of certain benefits from liability for contributions in respect of children in care etc.), after “1995)” insert “, an income-related allowance under Part 1 of the Welfare Reform Act 2006 (employment and support allowance)”.’.

Jimmy Hood: With this it will be convenient to discuss Government amendments Nos. 80 to 82, 84 to 109, 112 to 139, 72 to 74 and 76.

Anne McGuire: We have set out in the schedule a number of amendments to primary legislation that follow on from the creation of the employment and support allowance. Since the Bill was introduced, we have had the opportunity to identify a number of further amendments which are necessary to ensure that the new benefit operates alongside other benefits appropriately. For example, the amendments include provisions to ensure that children in families that receive income-related employment and support allowance will, in Scotland, England and Wales, be entitled to free school meals just as families that receive income support are. Other amendments will ensure that recipients of income-related employment and support allowance will not be liable to pay contributions for various services they receive from social services, just as income support recipients are not. Further amendments will mean that deductions can be made from income-related employment and support allowance for council tax purposes just as they can be made from income support.
The changes are necessary to ensure that recipients of the new benefit are not inadvertently disadvantaged, that the relevant rights and obligations still apply to them, and that employment and support allowance fits into the framework of existing legislative provision. I urge the Committee to accept the amendments.

Amendment agreed to.

Amendments made: No. 80, in schedule 3, page 55, line 2, at end insert—

‘Education (Scotland) Act 1980 (c. 41)

A2 In section 53(3) of the Education (Scotland)Act 1980 (pupils who qualify for free school meals etc.), in paragraphs (a) and (b), after sub-paragraph (ii) insert—
“(iia) an income-related allowance under Part 1 of the Welfare Reform Act 2006 (employment and support allowance);”.’.
No. 81, in schedule 3, page 55, line 2, at end insert—

‘Transport Act 1982 (c. 49)

A3 In section 70 of the Transport Act 1982 (payments in respect of applicants for exemption from wearing seat belts), in subsection (2) (applicants who qualify), in paragraph (b), for “or an income-based jobseeker’s allowance (payable under the Jobseekers Act 1995)” substitute “, an income-based jobseeker’s allowance (payable under the Jobseekers Act 1995), an income-related allowance under Part 1 of the Welfare Reform Act 2006 (employment and support allowance),”.’.
No. 82, in schedule 3, page 55, line 2, at end insert—

‘Legal Aid (Scotland) Act 1986 (c. 47)

A4 (1) The Legal Aid (Scotland) Act 1986 is amended as follows.
(2) In section 8(b) (under which persons in receipt of certain benefits are eligible for advice and assistance), for the words from second “or” to the end substitute “, an income-based jobseeker’s allowance (payable under the Jobseekers Act 1995) or an income-related allowance under Part 1 of the Welfare Reform Act 2006 (employment and support allowance),”.
(3) In section 11(2)(b) (under which persons not in receipt of certain benefits are liable to contribute to the cost of advice and assistance), for the words from second “or” to the end substitute “, an income-based jobseeker’s allowance (payable under the Jobseekers Act 1995) or an income-related allowance under Part 1 of the Welfare Reform Act 2006 (employment and support allowance),”.’.—[Mrs. McGuire.]

Amendment proposed: No. 83, in schedule 3, page 55, line 2, at end insert—

‘Income and Corporation Taxes Act 1988 (c. 1)

A5 (1) Section 347B of the Income and Corporation Taxes Act 1988 (qualifying maintenance payments) is amended as follows.
(2) In subsection (12) (payments to be treated as maintenance payments), at the end of paragraph (b) insert “; or
“(iia) made by virtue of section [Recovery of sums in respect of maintenance] of the Welfare Reform Act 2006 (recovery of sums in respect of maintenance), or any corresponding enactment in Northern Ireland, in respect of an income-related employment and support allowance claimed by any other person,”.
(3) For subsection (13) substitute—
“(13) In subsection (12)—
“income-based jobseeker’s allowance” has the same meaning as in the Jobseekers Act 1995 or, for Northern Ireland, the same meaning as in any corresponding enactment in Northern Ireland;
“income-related employment and support allowance” means an income-related allowance under Part 1 of the Welfare Reform Act 2006 (employment and support allowance) or, for Northern Ireland, under any corresponding enactment in Northern Ireland.”’.—[Mrs. McGuire.]

Jimmy Hood: With this it will be convenient to discuss Government amendments Nos. 111, 75, 77 and Government new clause 1—Recovery of sums in respect of maintenance.

Amendment agreed to.

Amendments made: No. 84, in schedule 3, page 55, line 2, at end insert—

‘Children Act 1989 (c. 41)

A6 (1) The Children Act 1989 is amended as follows.
(2) In section 17 (provision of services for children in need, their families and others), in subsection (9) (persons exempt from repayment of assistance), for “or of an income-based jobseeker’s allowance” substitute “, of an income-based jobseeker’s allowance or of an income-related employment and support allowance”.
(3) In section 17A (direct payments), in subsection (5) (persons in relation to whom special provision applies), in paragraph (b), for “or of an income-based jobseeker’s allowance” substitute “, of an income-based jobseeker’s allowance or of an income-related employment and support allowance”.
(4) In section 29 (recoupment of costs of providing services etc.), in subsections (3) and (3A) (exempt persons), for “or of an income-based jobseeker’s allowance” substitute “, of an income-based jobseeker’s allowance or of an income-related employment and support allowance”.
(5) In section 105 (interpretation), in subsection (1), after the definition of “income-based jobseeker’s allowance” insert—
““income-related employment and support allowance” means an income-related allowance under Part 1 of the Welfare Reform Act 2006 (employment and support allowance);”.
(6) In Schedule 2 (local authority support for children and families), in paragraph 21(4) (persons exempt from liability to contribute to maintenance of children looked after by local authority), for “or of an income-based jobseeker’s allowance” substitute “, of an income-based jobseeker’s allowance or of an income-related employment and support allowance”.’.
No. 85, in schedule 3, page 55, line 5, after ‘6’ insert
‘as amended by the Child Support, Pensions and Social Security Act 2000 (c. 19)’.
No. 86, in schedule 3, page 55, line 7, at end insert—
‘( ) In that section as it has effect apart from the Child Support, Pensions and Social Security Act 2000 (c. 19) (applications by those receiving benefit), in subsection (1), after “income-based jobseeker’s allowance” insert “, an income-related employment and support allowance”.’.
No. 87, in schedule 3, page 55, line 8, after ‘46’ insert 
‘as amended by the Child Support, Pensions and Social Security Act 2000 (c. 19)’.
No. 88, in schedule 3, page 55, line 11, at end insert—
‘( ) In that section as it has effect apart from the Child Support, Pensions and Social Security Act 2000 (c. 19) (failure to comply with obligations imposed by section 6), in subsection (11), in the definition of “relevant benefit”, after “income-based jobseeker’s allowance” insert “, an income-related employment and support allowance”.’.
No. 89, in schedule 3, page 55, line 11, at end insert—
‘( ) In section 47(3)(b) (persons to be exempted from payment of fees), after “income-based jobseeker’s allowance,” insert “an income-related employment and support allowance,”.’.
No. 90, in schedule 3, page 55, line 16, at end insert—
‘( ) In Part 1 of Schedule 1 as it has effect apart from the Child Support, Pensions and Social Security Act 2000 (c. 19) (calculation of child support maintenance), in paragraph 5(4) (parents who are to be taken to have no assessable calculable income), after “income-based jobseeker’s allowance” insert “, an income-related employment and support allowance”.’.
No. 91, in schedule 3, page 55, line 29, at end insert—
‘( ) In section 6A (notional payment of primary Class 1 contribution where earnings not less than lower earnings limit), in subsection (3) (purposes for which Class 1 contribution treated as paid), at end insert “; and
(e) any purposes relating to employment and support allowance.”’.
No. 92, in schedule 3, page 55, line 42, at end insert—
‘( ) In section 61A (contributions paid in error), in subsection (3), at the end of paragraph (c) insert “and”.’.
No. 93, in schedule 3, page 55, line 42, at end insert—
‘() In section 88 (increases of benefits to be in respect of only one adult dependant), for “86A” substitute “85”.’.
No. 94, in schedule 3, page 55, line 42, at end insert—
‘( ) In section 89(1) and (1A) (earnings to include occupational and personal pensions etc. for purposes of provisions relating to increases of benefits in respect of adult dependants), for “to 86A” substitute “to 85”.’.
No. 95, in schedule 3, page 56, line 23, at end insert—
‘( ) In paragraph 5 of Schedule 3 (contribution conditions for widowed mother’s allowance etc.), after sub-paragraph (6) insert—
“(6A) The first condition shall be taken to be satisfied if the contributor concerned was entitled to main phase employment and support allowance at any time during—
(a) the year in which he attained pensionable age or died under that age, or
(b) the year immediately preceding that year.
(6B) The reference in sub-paragraph (6A) to main phase employment and support allowance is to an employment and support allowance in the case of which the calculation of the amount payable in respect of the claimant includes an addition under section 2(1)(b) or 4(2)(b) of the Welfare Reform Act 2006 (addition where conditions of entitlement to support component or work-related activity component satisfied).”’.
No. 96, in schedule 3, page 57, line 20, at end insert—
‘( ) In section 74A (payment of benefit where maintenance payments collected by Secretary of State), in subsection (7) (benefits to which section applies), after “an income-based jobseeker’s allowance” insert “, an income-related employment and support allowance”.’.
No. 97, in schedule 3, page 57, line 26, at end insert—
‘( ) In section 109(1) (diversion of arrested earnings to the Secretary of State - Scotland), after “income support”, in both places, insert “or an income-related employment and support allowance”.’.
No. 98, in schedule 3, page 58, line 2, at end insert—
‘( ) In section 130 (duties of employers: statutory sick pay), in subsection (1) (power to require employer to supply information in connection with making of claim for certain benefits by employee), at end insert—
“(f) an employment and support allowance.”’.
No. 99, in schedule 3, page 60, line 31, at end insert—
‘( ) In section 165(6)(a) (under which no adjustment between the National Insurance Fund and the Consolidated Fund is required for administrative expenses of the Secretary of State relating to benefits payable out of money provided by Parliament), for “or section 20 of the State Pension CreditAct 2002” substitute “, section 20 of the State Pension CreditAct 2002 or section 24 of the Welfare Reform Act 2006”.’.
No. 100, in schedule 3, page 60, line 31, at end insert—
‘( ) In section 166 (financial review and report), in subsection (2) (duty at end of each review period to review operation of certain provisions)—
(a) after paragraph (b) insert—
“(ba) the provisions of Part 1 of the Welfare Reform Act 2006 relating to contributory employment and support allowance;”;
(b) in paragraph (c), for “and (b)” substitute “to (ba)”.’.
No. 101, in schedule 3, page 61, line 21, at end insert—

‘Local Government Finance Act 1992 (c. 14)

4A (1) The Local Government Finance Act 1992 is amended as follows.
(2) In Schedule 4 (enforcement in England and Wales)—
(a) in paragraph 6 (deductions from income support etc.), in sub-paragraphs (1) and (2)(b), for “or state pension credit” substitute “, state pension credit or an income-related employment and support allowance”;
(b) in paragraph 12 (relationship between remedies), after sub-paragraph (1)(bb) insert—
“(bc) deductions from income-related employment and support allowance may be resorted to more than once.”’;
(c) after paragraph 20 insert—
“21 In this Schedule, “income-related employment and support allowance” means an income-related allowance under Part 1 of the Welfare Reform Act 2006 (employment and support allowance).”
(3) In Schedule 8 (enforcement in Scotland)—
(a) in paragraph 6 (deductions from income support etc.), in sub-paragraphs (1) and (2)(b), for “or state pension credit” substitute “, state pension credit or an income-related employment and support allowance”;
(b) in that paragraph, at the end insert—
“(3) In this paragraph, “income-related employment and support allowance” means an income-related allowance under Part 1 of the Welfare Reform Act 2006 (employment and support allowance).”’.
No. 102, in schedule 3, page 62, line 13, at end insert—

‘Children (Scotland) Act 1995 (c. 36)

5A In section 22 of the Children (Scotland) Act 1995 (promotion of welfare of children in need), in subsection (4) (under which persons in receipt of certain benefits cannot be required to repay financial assistance), at end insert “; or
(c) an income-related allowance under Part 1 of the Welfare Reform Act 2006 (employment and support allowance).”’.
No. 103, in schedule 3, page 62, line 13, at end insert—

‘Employment Tribunals Act 1996 (c. 17)

‘5B (1) The Employment Tribunals Act 1996 is amended as follows.
(2) In section 16 (power to provide for recoupment of benefits)—
(a) in subsections (3)(a) and (c) and (5)(cc) and (e), for “or income support” substitute “, income support or income-related employment and support allowance”;
(b) in subsection (3)(b), for “either benefit” substitute “jobseeker’s allowance, income support or income-related employment and support allowance”;
(c) in subsection (4), for paragraph (b) substitute—
“(b) so as to apply to all or any of the benefits mentioned in subsection (3).”
(3) In section 17 (recoupment: further provisions), in subsection (1), for “or income support”, in both places, substitute “, income support or income-related employment and support allowance”.
(4) In that section, at the end insert—
“(5) In this section and section 16 “income-related employment and support allowance” means an income-related allowance under Part 1 of the Welfare Reform Act 2006 (employment and support allowance).”’.
No. 104, in schedule 3, page 62, line 13, at end insert—

‘Education Act 1996 (c. 56)

5C (1) The Education Act 1996 is amended as follows.
(2) In section 457 (charges and remissions policies), in subsection (4)(b) (cases where receipt of benefit by pupil’s parent to give rise to remission), after sub-paragraph (ii) insert—
“(iia) in receipt of an income-related employment and support allowance,”.
(3) In section 512ZB (provision of free school lunches and milk), in subsection (4) (eligibility for free lunches), in paragraphs (a) and (b), after sub-paragraph (ii) insert—
“(iia) in receipt of an income-related employment and support allowance,”.
(4) In section 579 (interpretation), in subsection (1), after the definition of “higher education” insert—
““income-related employment and support allowance” means an income-related allowance under Part 1 of the Welfare Reform Act 2006 (employment and support allowance);”.’.
No. 105, in schedule 3, page 63, line 8, at end insert—

‘Immigration and Asylum Act 1999 (c. 33)

7A In section 115 of the Immigration and Asylum Act 1999 (exclusion from benefits), in subsection (1) (benefits to which entitlement excluded), after “State Pension Credit Act 2002” insert “or to income-related allowance under Part 1 of the Welfare Reform Act 2006 (employment and support allowance)”.
No. 106, in schedule 3, page 63, line 8, at end insert—

‘Child Support, Pensions and Social Security Act 2000 (c. 19)

7B (1) Section 62 of the Child Support, Pensions and Social Security Act 2000 (loss of benefit for breach of community order) is amended as follows.
(2) After subsection (4) insert—
“(4A) The Secretary of State may by regulations provide that, where the relevant benefit is an employment and support allowance, any income-related allowance (within the meaning of Part 1 of the Welfare Reform Act 2006) shall be payable, during the whole or part of the prescribed period, as if one or more of the following applied—
(a) the rate of the allowance were such reduced rate as may be prescribed;
(b) the allowance were payable only if there is compliance by the offender with such obligations with respect to the provision of information as may be imposed by the regulations;
(c) the allowance were payable only if the circumstances are otherwise such as may be prescribed.”
(3) In subsection (8), in the definition of “relevant benefit”, after paragraph (b) insert—
“(ba) an employment and support allowance;”.’.
No. 107, in schedule 3, page 63, line 8, at end insert—

‘Local Government Act 2000 (c. 22)

7C In section 94 of the Local Government Act 2000 (disclosure of information), in subsection (1) (benefit information which may be disclosed), for “or state pension credit” substitute “, state pension credit or an income-related employment and support allowance.’.
No. 108, in schedule 3, page 63, line 8, at end insert—

‘Adults with Incapacity (Scotland) Act 2000 (asp 4)

7D (1) The Adults with Incapacity (Scotland) Act 2000 is amended as follows.
(2) In section 39(1)(a) (which excepts from matters which may be managed those relating to benefit under the Contributions and Benefits Act), at end insert “or Part 1 of the Welfare Reform Act 2006”.
(3) In section 41(a) (duties of managers in relation to matters which may be managed), at end insert “or Part 1 of the Welfare Reform Act 2006”.’.
No. 109, in schedule 3, page 63, line 8, at end insert—

‘Social Security Fraud Act 2001 (c. 11)

7E (1) Section 9 of the Social Security Fraud Act 2001 (effect of offence on benefits of members of offender’s family) is amended as follows.
(2) In subsection (1) (benefits to which section applies), after paragraph (bb) insert—
“(bc) employment and support allowance;”.
(3) After subsection (4A) insert—
“(4B) In relation to cases in which the benefit is employment and support allowance, the provision that may be made by virtue of subsection (2) is provision that, in the case of the offender’s family member, any income-related allowance shall be payable, during the whole or a part of any period comprised in the relevant period, as if one or more of the following applied—
(a) the rate of the allowance were such reduced rate as may be prescribed;
(b) the allowance were payable only if there is compliance by the offender or the offender’s family member, or both of them, with such obligations with respect to the provision of information as may be imposed by the regulations;
(c) the allowance were payable only if circumstances are otherwise such as may be prescribed.”’.—[Mrs. McGuire.]

Schedule 3, as amended, agreed to.

Clause 26 ordered to stand part of the Bill.

Schedule 4

Transition relating to Part 1

Danny Alexander: I beg to move amendmentNo. 197, in schedule 4, page 65, line 30, leave out paragraph 6.
The purpose of this amendment is to clarify further the Government’s intentions about applying the employment and support allowance regime to existing claimants of incapacity benefit and of income support on incapacity grounds. The Minister made some reference to that matter in replying to a previous debate, but a number of issues could usefully be clarified.
There has been some confusion about the plansto move existing IB and existing income support recipients once employment and support allowance is introduced. The Green Paper indicated that the ESA regime would apply only to new claimants, although the response to the consultation stated that existing claimants would be migrated across to ESA in time. That has been the approach that the Minister has taken in his comments to the Committee.
The amendment proposes to leave out paragraph 6 of schedule 4 to probe the Government’s intentions. That provides for regulations to include the migration of existing recipients on to the ESA regime. According to paragraph 307 of the explanatory notes, migration can be voluntary or mandatory. In Committee, the Minister stated that
“those who are most recent to the benefit should be those most likely to have the opportunity to get back to work”
and that the Government have
“looked for ways in which to migrate the newest ... claimants on to the new ESA.”—[ Official Report, Standing Committee A,17 October 2006; c. 42.]
Can the Minister clarify whether that refers to the approach that has been taken in the existing pathways, where existing claimants are gradually invited to attend pre-mandatory work-focused interviews? Is that what is meant by mandatory migration, where the choice between mandatory and voluntary is spelled out?
The change in regime from either incapacity benefit or income support on grounds of incapacity to employment and support allowance will obviously impact on claimants in a number of different areas: the income they receive, work-related conditions, the access to employment opportunities to which they are subject to and the means by which their continuing entitlement to benefit is assessed and reassessed. There are some points in each of those areas on which I would welcome some clarification from the Minister.
On incomes, the Government’s response to the consultation on the Green Paper stated that
“existing claimants’ benefit levels will be protected.”
Does that refer to when an existing claimant is migrated to ESA? We have not discussed rates in this Committee, for obvious reasons. It has been made clear repeatedly that ESA is likely to be higher than the current long-term rate of incapacity benefit. The Minister might wish to confirm that in his remarks. I do not wish to probe him on how much he expects it to be, because at this stage it is hard to know. A single person over the age of 25 on income support with a disability premium could receive a total of £81.95 a week at the moment. Would the income level of someone receiving more now than they would under ESA—if he can imagine any such cases—be protected?
I will not go into detail about work-related conditions and employment, but there is clearly an issue about people who have been on incapacity benefit for a long period. The Minister referred to the fact that he will be looking to migrate not just new claimants but people with dependent children in the early phase of migration, for the purpose of tackling child poverty—at least I think that that is his intention. That could well include people who have been on incapacity benefit for a considerable period and who have particular issues for personal advisers to deal with. It is important to make it clear that in cases where people who have been on benefit for a very long time are among those being migrated in the early phase, advisers will have support to work with those people, not least those with severe and enduring mental health problems. Will the Minister clarify that?
The Green Paper and the Government’s response to the Select Committee report anticipated a more systematic review of existing claimants through the establishment of a unit to undertake periodic reviews and ad hoc case checks, which might be followed by personal capability assessments where there is doubt about someone’s incapacity for work. Page 48 of the Green Paper said that it was intended to target a minority of claimants who might seek to prolong their time on a protected level of incapacity benefit. Will the Minister enlighten the Committee as to what progress has been made in setting up that process, and what the plans are for random checks and so forth?
To follow through on how a reassessment might take place for someone who has been migrated to the new benefits, can the Minister clarify whether existing claimants will be subject to revised personal capability assessments when their cases come up for review? If someone is currently on benefits and is migrated to the new benefits, will they have to go through the revised PCA when their case comes up for review? Obviously, they got benefits in the first place through the existing PCA with all its inadequacies, which we debated at some length. I should be grateful if he clarified some of those issues in his response.

David Ruffley: I will keep my questions brief. As the hon. Gentleman said, the explanatory notes refer to regulations that could provide for either voluntary or mandatory migration. It would be extremely useful and important to understand what would influence Ministers to take the voluntary route as against the mandatory route. I know that there are two options, but it would be useful to understand why they are there.
The second question relates to the financial terms on which the migration, whether voluntary or mandatory, will take place. For someone who was, before the commencement of this Act, on good old-fashioned incapacity benefit, it seems logically to be the case that, on migrating to ESA, they will go on to the new higher rates. There is a question attached to that.
When the migration takes place, existing claims on IB migrate on to ESA at the higher rates. Does it not follow that an IB claimant who, for the sake of argument, passed a PCA at the beginning of 2008—weeks before the commencement of the Bill—and then migrated on to ESA would in the act of migration have to have an assessment under clauses 8 and 9? If they were in the work-related activity component, would they have to take the test in clause 10? It seems that the regime would have to be repeated for the IB claimant who passed the PCA a matter of weeks before the commencement of the Bill. Otherwise, there would be no way in which the higher component for support or work-related activity could possibly be awarded, unless the migrating IB claimant had gone through the full panoply of the new ESA regime.

Danny Alexander: The hon. Gentleman has illuminated one of the points that I was trying to make. Has he also considered the fact that in the situation he is describing, the roll out of pathways to work will have taken place, so those people will have an ability to take part in support to pathways to work while not being subjected to the conditionality regime that someone assessed a few weeks later would be subjected to? There is a question of balance and fairness in relation to how those two quite similarly situated payments will be treated.

David Ruffley: The hon. Gentleman makes a good point, and in the interests of expeditious debating I will sit down and await with keen interest the Minister’s response to my questions and those of the hon. Gentleman.

Jim Murphy: We are making fantastic progress, which I do not wish to delay, so I will respond to the specific points raised, rather than read out another well-crafted speech. I am glad that my hon. Friend the Member for Ochil and South Perthshire has had the opportunity to have a profile in the Committee—he volunteered and is here because this is something he is committed to and interested in. He would normally fulfil his role for the Minister for Pensions Reform, rather than in relation to employment and welfare reform, so it is important to note that he is here due to his continuing commitment to the issues we are discussing. Unfortunately, we will not have the opportunity to hear his comments because of parliamentary protocol.
Our intention, as we introduce ESA from 2008 onwards based on the national pathways, is that as we migrate the mix of volunteerism and mandatory migration—I will say a few words about that in a moment—we will have a benefit architecture that is relatively straightforward and that, over time, will bring together some of the entitlements and some of the conditionality. However, that would be with the important distinctions that we have already mentioned on current customers of IB not having to undertake work-related activity as a condition of receipt of benefit.
In time, we would like to see new customers coming into the ESA, and existing IB customers in time also being on the ESA. That is our intention as an end point in terms of the simplification of the inactive benefits regime. In terms of how we get there, it is our intention that for someone who migrates on to ESA under mandatory migration in the future, the extent oftheir personal capability assessment, which I think the hon. Member for Inverness, Nairn, Badenoch and Strathspey alluded to, will fall under clause 9. At that point of migration, would not be a full PCA.
The next PCA that an existing customer of IB moving across at the point of mandatory migration would receive would be the next scheduled PCA. There would not be a PCA gateway on entitlement to ESA per se. As I am sure hon. Members would accept, there would, quite rightly, be a PCA gateway based on the clause 9 aspect to ascertain whether that existing IB customer—who may be in an exempt or non-exempt category—should be in the support group or the work-related activity group. Clause 9 deals with the aspect that would determine that. I hope that that answers a number of questions.
On volunteering, the Bill allows migration on to the ESA benefit structure, but as we roll out pathways nationwide between now and 2008, it is our intention to enable current IB customers to volunteer for the pathways-style support, with the six work-focused interviews. To enable that volunteering and the mandatory migration at a later point, we shall build on the best experience of the current roll-out of pathways and the various pilots that we have spoken about in some detail.
One of the best examples is perhaps the pilot in Somerset, which has not only started with recent IB, but gone right through the current case load. We shall learn from that. Our instinct is to enable the mandatory migration through time, based on what we think we know already, which is that the most recent and freshest claims are by the folk who are most likely to be supported to get back into work, the additional point being about the impact of child poverty and, therefore, migrating folk with dependent kids.
However, we will learn from the experience of the pilot in Somerset—predominantly there, but not exclusively so—about what has been the most successful way of supporting a significant number of customers to come off IB and go into work and economic activity. My point is that we are not dogmatic, and over time there might be a play-off between child poverty and length of time on benefit. Our approach is to go with what works.

Danny Alexander: That approach is sensible. Does the Minister envisage a time when all existing claimants will have been migrated or does he think that there will be some categories of existing claimant for whom a migration will never be appropriate?

Jim Murphy: In time—I am not going to say which time, and the hon. Gentleman would not reasonably ask me to—we would expect all customers to be migrated on to ESA, with the distinction that existing IB customers would not have to undertake the work-related activity, but would undertake the work-focused interviews. Through time, as the process evolves to enable those who wish to volunteer for the support that is available to do so, we would expect to have migrated all those who have not volunteered to the new ESA regime—a terrible phrase—with the important caveat of protecting benefit levels at the point of transfer.

David Ruffley: On that point, can the Minister be a bit clearer about guaranteeing the benefits at the point of transfer? What will that mean for an IB recipient who migrates on to ESA?

Jim Murphy: The hon. Member for Daventry is not with us, but, to put it into saloon bar talk, the blunt answer is that the cash that they have in their pocket, with whatever additions they currently receive, will be protected at the point of transfer to ESA. The amount that they have in cash terms will be protected.

Danny Alexander: I am grateful for that response and, although I do not wish to take any more of the Committee’s time than is absolutely necessary, I would like to clarify a couple of points one more time. One relates to the point in the Green Paper on establishing random ad hoc checks and the idea of setting up a unit to undertake them, with a view to targeting the, as the Green Paper put it,
“minority of claimants who...will seek to prolong unnecessarily their time on the protected level of incapacity benefits.”
The other point relates to the PCA and how it will be applied. I take on board what the Minister said about people not being obliged to go immediately through a full PCA under clauses 8 and 9—he clarified the fact that they will have the clause 9 assessment. However, I am thinking about the case of somebody who may previously have been on incapacity benefit as a result of the old PCA and who has been migrated from the existing benefit to the new. At some later stage, they are likely to be called back for a full PCA under the new regime, as described in clauses 8 and 9, and potentially in clause 10.
That person might then discover that they are no longer entitled to ESA because of the revised scoring system, or for another reason. Will such people still have access to the specialist advisers and sources of support that are available under the pathways programme, which they may need by virtue of their condition and from which they may previously have benefited while on ESA?
That may be a difficult question to answer straight away, but it is important that people in that unusual category should continue to benefit from their existing support, rather than being left to the harsher climate—without intending that term to be taken pejoratively—that is applied to claimants for jobseeker’s allowance.

Jim Murphy: I shall be brief, because we can continue the conversation on some of the specifics if we are given the opportunity to do so between now and 2008. The hon. Gentleman is right that we have said that we shall carry out, on a risk-based approach, some assessment of continuing entitlement to benefit. That ties in with the comments made on disqualification by the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Stirling (Mrs. McGuire).
I hope that the hon. Gentleman accepts that, as part of that random approach, we also want to ensure that customers are given the support that the Bill will put in place, which we have considered in our proceedings in the last few days. It is a matter of continuing entitlement to benefit, but also of ensuring that customers get the support that we as Parliament wish them to get. That is an important double-check.
The hon. Gentleman would not expect me to speculate on each and every circumstance. We have all welcomed the new PCA, which will take greater account of mental health, illness, learning disabilities and other conditions, based on the 46 descriptors and the 15 points. We shall consider the most appropriate level of support—not at point of transfer, but under the new PCA—when that is due, and at the point that he identified. It is a conversation to be continued.

Danny Alexander: I am grateful for that further clarification and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 4 agreed to.

New Clause 1

Recovery of sums in respect of maintenance
‘(1) Regulations may make provision for the court to have power to make a recovery order against any person where an award of income-related allowance has been made to that person’s spouse or civil partner.
(2) The reference in subsection (1) to a recovery order is to an order requiring the person against whom it is made to make payments to the Secretary of State or to such other person or persons as the court may determine.
(3) Regulations under subsection (1) may include—
(a) provision as to the matters to which the court is, or is not, to have regard in determining any application under the regulations;
(b) provision as to the enforcement of orders under the regulations;
(c) provision for the transfer by the Secretary of State of the right to receive payments under, and to exercise rights in relation to, orders under the regulations.
(4) In this section, “the court” means—
(a) in relation to England and Wales, a magistrates’ court;
(b) in relation to Scotland, the sheriff.’.—[Mr. Murphy.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 2

Deemed entitlement for other purposes
‘Regulations may provide for a person who would be entitled to an employment and support allowance but for the operation of any provision of, or made under, this Part, the Administration Act or Chapter 2 of Part 1 of the Social Security Act 1998 (c. 14) (social security decisions and appeals) to be treated as if entitled to the allowance for the purposes of any rights or obligations (whether his own or another’s) which depend on his entitlement, other than the right to payment of it.’.—[Mr. Murphy.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 6

Interviews and assessments
‘It shall be a duty of the Secretary of State to ensure that in respect of interviews and assessments conducted in accordance with Part 1 of this Act
(a) claimants are notified of the purpose or purposes of the interview or assessment,
(b) those conducting interviews or assessments are qualified in accordance with standards that the Secretary of State shall by regulation prescribe, and
(c) account is taken of the circumstance in respect of which claimants fail to attend or complete an interview or assessment.’.—[Mr. Hunt.]

Brought up, and read the First time.

Jeremy Hunt: I beg to move, That the clause be read a Second time.
I shall be brief in an attempt to prove that the hon. Member for Ochil and South Perthshire was right to say that we are making excellent progress in the evenings. I am happy to mention his name for the record once again.
The new clause is probing. I wish to ask the Minister to reassure the Committee that when claimants are going through interviews and assessment conducted under part 1, they are notified of the purpose or purposes of the interview or assessment. The assessments will obviously be important, as they will determine the level of benefit and the level of conditionality attached to it. It is important that those who have learning disabilities, or a wide range of other disabilities, understand the purpose of those interviews or assessments.
I also ask the Minister to assure the Committee that those conducting the interviews or assessments are properly qualified. We have discussed that at length and we do not need to revert to it. Indeed, the Minister has already given some reassurance on that point. Likewise, he assured us in earlier debates that, as in paragraph (c), account should be taken of
“the circumstance in respect of which claimants fail to attend or complete an interview or assessment.”
On paragraph (a), I should be grateful if the Minister were to give the Committee an assurance that claimants should be notified of the purposes of their interview or assessment

Jim Murphy: I am happy to respond briefly to those three points. The hon. Gentleman rightly says that we have had similar conversations on clauses 8 and 10. I confirm, for the Committee’s delight, that the provisions of paragraph (a) are contained in page 6 of the draft regulations, which deals with safeguards before sanctions are imposed. The question of advising the customer at the point of claiming about the interview process is bullet point No. 1 on page 6 of the draft regulations. I hope that I have provided the reassurance that the hon. Gentleman seeks.
When possible, customers are contacted by telephone to explain the purpose of the interview or assessment, what to expect and what to do if they have a problem attending. We also write to all our customers, whether or not they have been contacted by phone. We intend to continue with that process under the ESA.
The point that the hon. Gentleman raises with paragraph (b) was the subject of a previous conversation; as we heard earlier today, it is found within the contracts. As for paragraph (c), page 26 of the draft regulations deals with claimants failing to attend or complete an interview or assessment. In the spirit in which the hon. Gentleman posed his questions, I hope that I have reassured him and that he will be tempted to withdraw the motion.

Jeremy Hunt: I am grateful to the Minister. I am happy to have been reassured. I beg to ask leave to withdraw the motion.

Motion and new clause, by leave, withdrawn.

New Clause 12

Duty to report on impact of Part I on older people and others
‘(1) The Secretary of State shall annually lay before Parliament a report on the effects of Part One of this Act on recipients of the allowance, with respect to their employment opportunities and health.
(2) The report shall describe separately the impact on—
(a) people aged over 50,
(b) people with mental health conditions, and
(c) people who have been in receipt of the allowance for longer than 3 years.’.—[Mr. Ruffley.]

Brought up, and read the First time.

Motion made, and Question put, That the clause be read a Second time:—

The Committee divided: Ayes 4, Noes 8.

Question accordingly negatived.

New Clause 13

Earnings disregard level
‘(1) The Secretary of State may make regulations that the level of earnings disregard for claimants of Employment and Support Allowance shall be set at a level that he shall by determine.
(2) In determining the level of earnings disregard under subsection (1) the Secretary of State shall have regard to labour market conditions including the National Minimum Wage as defined under section 1 of the National Minimum Wage Act 1998 (c. 39).’.—[Mr. Ruffley.]

Brought up, and read the First time.

Motion made, and Question put, That the clause be read a Second time:—

The Committee divided: Ayes 4, Noes 8.

Question accordingly negatived.

New Clause 14

Part-time work and employment and support allowance
‘The Secretary of State shall be required to introduce a pilot to assess the impact of permitting a claimant who is a member of the support group to continue to receive a fixed proportion of their employment and support allowance in circumstances where their part-time work exceeds the maximum permitted hours.’.—[Mr. Hunt.]

Brought up, and read the First time.

Jeremy Hunt: I beg to move, That the clause be read a Second time.
I appreciate that we are getting to the end of a long day and hope that I might be able to persuade Ministers to consider the new clause. Let me explain it briefly: it asks the Secretary of State to set up a pilot whereby people in the support group should not be subject to the restrictions that currently exist on permitted hours. The thinking is that people in the support group will have been objectively assessed as having the most severe disabilities according to the 46 descriptors that the Minister has explained to us. Many of them are unlikely ever to be off the support element for the length of their lives. Therefore, for those people, breaking down any barriers that could prevent them from taking steps towards the world of work not only would be beneficial, but might not, I suggest to the Committee, cost the taxpayer any money at all. Because of the nature of the disabilities that those people have they are unlikely to move out of the support group. It may happen, but for many it is unlikely.
Will the Minister consider the fact that for people in the support group, particularly those subject to the lower £20 earnings disregard limit, it is unlikely that they will be able to move from just three and a half hours work at the minimum wage to full-time employment, but they may be able to manage part-time employment. If they are concerned about losing their benefits package, which is vital for the independence it gives them, they are unlikely to want to make that transition.
I have tabled the new clause providing for a pilot because I recognise that we are in uncharted territory and that it is possible that there could be public spending commitments because we are talking about relaxing the permitted hours for a significant number of people. It depends slightly on what proportion of people are actually put in the support group.

Adam Afriyie: I suspect that my hon. Friend was coming to this point, but it might also mean a spending reduction for the DWP if a certain proportion transfer and take up part-time or full-time work. So this could actually be a net benefit to the Exchequer rather than a net deficit.

Jeremy Hunt: I am grateful to my hon. Friend because that is my belief. As I have argued on earlier clauses, relaxing the earnings disregard is likely to encourage more people to move closer to the world of work and therefore reduce the number of people on the benefit.
This is uncharted territory, which is why we have phrased the new clause as a pilot. We might learn things about relaxing the permitted hours with the support group which it might be possible to apply at a later stage to the work-related activity group. We will not learn any of those things unless we have a pilot. I ask the Minister to give careful consideration to having this pilot.
I have received many representations, as I am sure all members of the Committee have, from disability organisations who are concerned that people in the support group might not have the same opportunities as those in the work-related activity group. We have discussed that endlessly and I do not want to return to those debates, but having a pilot that showed a bit of flexibility over the permitted hours for people in the support group might teach everyone a little bit about how human motivation works in these situations. If it helped people in the support group—who are, by definition, the most disadvantaged in society—to move closer to the world of work, and to develop a degree of independence and self respect it would be admirable.I hope that the Government will give it generous consideration.

Jim Murphy: Remarkable progress is being made. I shall respond, hopefully in a similar tone to that of the hon. Gentleman when he raised his genuine point. As he knows, there is a greater propensity and likelihood of continued poverty among those who are assessed to be in the support group. That is the major reason why we anticipate having two tiers of benefit payment on the basis that it would provide a degree of financial support to those in the support group that otherwise would be missing.
Customers in receipt of incapacity benefit can undertake part-time work up to a maximum of16 hours a week and earnings must not exceed £86 a week. We intend to carry forward similar permitted work provisions for the employment and support allowance. I recognise that there may be people in the support group who are able to work in excess of the 16-hour limit. The fact that someone on the support group is able to work is not of itself a reason why he or she should be removed from the support group. A PCA would assess whether someone should still be in the support group. It is important to get that across when we try to encourage those in the support group who wish to work to have the chance to do so.
The 16-hour limit is there for two reasons. First, it is there to make a distinction between allowing part-time work while on benefit as a stepping stone to independence and to top up earnings. Secondly, 16 hours is the recognised boundary between the out-of-work benefits system and the in-work tax credits system. We do not need the power in the Bill to do what the hon. Gentleman wishes to do. We have the powers to be flexible in this sort of area already. We are looking at ways to continue to be flexible and to improve the permitted work rules.

Jeremy Hunt: The Minister mentioned £86 as being the upper earnings limit for people on IB. Will he confirm that that will be case for people on ESA, even if they are coming on to ESA on an income-related basis? Currently those people have an earnings disregard of just £20, which is significantly less.

Jim Murphy: On the contributory level it will be £86. I cannot confirm that in terms of the income-related scheme. The hon. Gentleman put his specific question pretty fairly: the phrase he used was “careful consideration”. I can assure him that we continue to look at the most effective way of enabling improvements and flexibilities in permitted work. We will look at the very carefully indeed in advance of 2008 and the national roll-outof ESA.

Adam Afriyie: Will the Minister give way?

Jim Murphy: No. I am going to conclude.
In terms of the specific point, we will give careful consideration to the matters that the hon. Member for South-West Surrey raised. I hope that he accepts that we do not need in the Bill the type of power that he seeks to give us to do the type of thing that he wishes. We already have that power to implement the flexibility. We will look at additional schemes for permitted work that may reassure him and others in future.

Jeremy Hunt: I am grateful to the Minister for that response. I am somewhat reassured, and for the purposes of this sitting I am happy to ask leave to withdraw the new clause.

Motion and clause, by leave, withdrawn.

Clause 27

Local housing allowance

Danny Alexander: I beg to move amendmentNo. 257, in clause 27, page 19, line 15, at end insert
‘and those categories of tenants to whom it applies’.
In proposing the amendment I feel a little like the minister in my constituency whose sermon was eaten by his dog. When he arrived in the pulpit he said, “I am going to speak to you as the Lord directs, but I shall try to do better next week.” The purpose of the amendment is fairly clear. There has been some controversy surrounding the local housing allowance and we will no doubt go into that in more detail in our next sitting. In respect of the amendment there has also been some controversy about the categories of tenants. I notice that the Minister’s supporting cast has left the room, so perhaps now is a good time to get some concessions out of him.
The question to which I want an answer from the Minister is which categories the local housing allowance will apply to. Clearly, the Government’s intention is to look at housing allowance for tenants in the private sector only; tenants in social housing whether it is provided by registered social landlords, housing associations or local authorities, and, if I remember correctly, those in pre-1989 tenancies, would also be exempt from the local housing allowance. However, that is not stated anywhere in the Bill and as far as I can see from how the Bill is constructed it does not allow that to be made clear in regulations, although the Minister will correct me if I am wrong.
Concern has been expressed about the possibility of rolling out local housing allowance to the categories of tenancy that I have outlined—it is not an exhaustive list, but the Minister knows what I mean. There has also been a lot of concern to roll out the local housing allowance to the social housing sector without further primary legislation. I know that Ministers have decided that that is not what they want to do and it would be worrying to the landlords. I hope that the Minister can clarify that the provisions of the Bill will apply only to tenants in receipt of housing benefit in private sector tenancies and not to any other categories. Should any proposals be made either to extend it to social housing or more generally by virtue of a pilot, that would be subject to further primary legislation and could not be achieved simply by regulation under this Bill.

Anne McGuire: I congratulate the hon. Member for Inverness, Nairn, Badenoch and Strathspey on something that appeared to be off the cuff. I am not being patronising; I thought that he made a good job of a proposal that we did not expect to reach this evening.
I reassure the hon. Gentleman that as set out in the draft regulations we do not propose to apply the local housing allowance approach to tenants currently excluded from it in the pathfinders including those in the social sector. For a customer to be entitled to housing benefit there must be an appropriate maximum housing benefit in his case. That is the basic condition of entitlement. As members of the Committee are aware, proposals for housing benefit were set out in the welfare reform Green Paper. Although our plans for rolling out local housing allowance to the private rented sector met with strong support across the sectors, many of those who responded to our Green Paper raised concerns, which the hon. Gentleman expressed tonight, about the introduction of a local housing allowance into the social sector. We have listened carefully to those concerns, and we stated in our response that we will not proceed with local housing allowance in that sector.
Draft regulation 13C, which has been circulated to the Committee, sets out the circumstances in which a local authority must calculate an appropriate maximum housing benefit using the LHA rules. It lists all the categories of customer to whom the local housing allowance is not to apply where circumstances in regulation 13C arise. For example, local housing allowance will not apply where a landlord is a registered social landlord, local authority or registered charity, where the rent is payable—I admire the hon. Gentleman’s memory—in respect of a pre-1989 tenancy agreement and includes a site charge or mooring charge for a mobile home, caravan or houseboat, or where rent under the tenancy is attributable to board and attendance.
I hope that I have given the hon. Gentleman the reassurance that he sought. I am delighted to offer reassurance to those who responded to the Green Paper consultation to raise concerns, and I ask him to consider withdrawing his amendment.

Danny Alexander: I am grateful to the Minister for that response. It has indeed offered me the reassurance that I was looking for. I should have made it clear in my opening remarks that it is quite right to say that local housing allowance has proved successful in many ways in the pilots. I will have a chance to flesh that out more during the clause stand part debate, but as she has put her response on the record, and so that we can go home tonight, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.
Further consideration adjourned.—[Mr. Heppell.]

Adjourned accordingly at six minutes past Ten o’clock till Thursday 2 November at ten minutes pastNine o’clock.